Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93904
Authors: 
Jun, Byoung Heon
Wolfstetter, Elmar G.
Year of Publication: 
2013
Series/Report no.: 
SFB/TR 15 Discussion Paper 403
Abstract: 
If bidders are uncertain whether the auctioneer sticks to the announced reserve, some bidders respond by not bidding, speculating that the auctioneer may revoke the reserve. However, the reserve inadvertently signals the auctioneer's type, which drives a unique separating and a multitude of pooling equilibria. If one eliminates belief systems that violate the intuitive criterion, one obtains a unique equilibrium reserve price equal to the seller's own valuation. Paradoxically, even if bidders initially believe that the auctioneer is bound by his reserve almost with certainty, commitment has no value.
Subjects: 
Auctions
signalling
mechanism design
JEL: 
D21
D43
D44
D45
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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