Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61252
Authors: 
Jeitschko, Thomas D.
Wolfstetter, Elmar
Year of Publication: 
1998
Series/Report no.: 
Discussion Papers, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 1998,62
Abstract: 
We analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects in the form of stochastic economies or diseconomies of scale. We show that economies give rise to declining expected equilibrium prices, whereas the converse is not generally true. Moreover, first- and second-price auctions are not always revenue equivalent. Indeed, economies of scale make the second-price format more profitable for the seller, whereas revenue equivalence holds in the case of diseconomies.
Subjects: 
auctions
procurements
sequential auctions
economies of scale
JEL: 
D44
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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