Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/37397
Authors: 
Krähmer, Daniel
Year of Publication: 
2010
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Auctions with Asymmetric Information A13-V1
Abstract: 
This paper studies optimal auction design when the seller can affect the buyers' valuations through an unobservable ex ante investment. The key insight is that the optimal mechanism may have the seller play a mixed investment strategy so as to create correlation between the otherwise (conditionally) independent valuations of buyers. The paper establishes conditions under which the seller can, in fact, extract the first best surplus almost fully.
Subjects: 
Auction
ex ante investment
full surplus extraction
correlation
mechanism design
JEL: 
C72
D44
D82
Document Type: 
Conference Paper

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