Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197147 
Year of Publication: 
2018
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 13 [Issue:] 1 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2018 [Pages:] 273-306
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We analyze a setting common in privatizations, public tenders, and takeovers in which the ex post efficient allocation, i.e., the first best, is not implementable. Our first main result is that the open ascending auction is not second best because it is prone to rushes, i.e., all active bidders quitting simultaneously, that undermine its efficiency. Our second main result is that the second best can be implemented with a two-round auction used in real-life privatizations. We also show how this result generalizes using a survival auction with a novel tie-breaking rule.
Subjects: 
Privatization
efficiency
auctions
mechanism design
multi-round mechanisms
JEL: 
D44
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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