A note on reserve price commitments in the Vickrey auction

This note provides a simple explanation why sellers rarely set optimal reserve prices in one-shot auctions. In a standard sealed-bid second-price auction, bidders with private values do not bid truthfully if the seller cannot commit to her announced reserve price. Consequently, expected revenue may be lower than without the announcement of a reserve price.

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Year of publication:	2006-08
Authors:	Glowicka, Ela ; Beck, Jonathan
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Vickrey auction \| reserve price \| commitment

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	D44 - Auctions ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005621705