Why Are Vickrey Auctions Rare?
In 1961, William Vickrey showed that, in an independent private-values context with symmetric risk-neutral bidders, sealed second-price auctions have dominant truth-revealing equilibrium strategies; are perfectly efficient economically; and produce the same expected revenue for bid takers as equilibrium strategies in oral progressive auctions, Dutch auctions, or standard, first-price sealed bidding. Yet sealed second-price auctions seldom occur. The authors argue that fear of cheating and especially disincentives for bidders to follow truth-revealing strategies are important explanations. They model auctions in which third parties capture a fraction of the economic rent revealed by the second-price procedure. Copyright 1990 by University of Chicago Press.
Year of publication: |
1990
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Authors: | Rothkopf, Michael H ; Teisberg, Thomas J ; Kahn, Edward P |
Published in: |
Journal of Political Economy. - University of Chicago Press. - Vol. 98.1990, 1, p. 94-109
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Publisher: |
University of Chicago Press |
Saved in:
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