Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92837
Authors: 
Gunay, Hikmet
Meng, Xin
Nagelberg, Mark
Year of Publication: 
2012
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 849
Abstract: 
We 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, we show that the number of bidders affects the reserve price. Second, we give the sufficient conditions for the uniqueness of the optimal reserve price. Third, we find that if a bidder is replaced by a stronger bidder, the optimal reserve price may decrease. Finally, we 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
Document Type: 
Working Paper

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