Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83975
Authors: 
Azacis, Helmuts
Burguet, Roberto
Year of Publication: 
2005
Series/Report no.: 
Cardiff Economics Working Papers E2005/11
Abstract: 
The existence of ex-ante strong incumbents may constitute a barrier to entry in auctions for goods such as licenses. Introducing inefficiencies that favor entrants is a way to induce entry and thus create competition. Designs such as the Anglo-Dutch auction have been proposed with this goal in mind. We first show that indeed the Anglo- Dutch auction fosters entry and increases the revenues of the seller. However, we argue that a more eective way could be to stage the allocation of the good so that each stage reveals information about the participants. We show that a sequence of English auctions, with high reserve prices in early rounds, is a procedure with this property that is more efficient than any one-stage entry auction. Moreover, it also dominates the Anglo-Dutch auction in terms of seller's revenues.
Document Type: 
Working Paper

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