Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70480
Authors: 
Gunay, Hikmet
Meng, Xin
Nagelberg, Mark
Year of Publication: 
2013
Series/Report no.: 
Economics Discussion Papers 2013-19
Abstract: 
The authors analyze the optimal reserve price in a second price auction when there are N types of bidders whose valuations are drawn from different distribution functions. The seller cannot determine the specific type of each bidder. First, the authors show that the number of bidders affects the reserve price. Second, they give the sufficient conditions for the uniqueness of the optimal reserve price. Third, the authors find that if a bidder is replaced by a stronger bidder, the optimal reserve price may decrease. Finally, they give sufficient conditions that ensure the seller will not use a reserve price; hence, the auction will be efficient.
Subjects: 
auction
reserve (reservation) price
asymmetric bidders
JEL: 
D44
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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