On the benefits of dynamic bidding when participation is costly

Journal Article (Journal Article)

Consider a second-price auction with costly bidding in which bidders with i.i.d. private values have multiple opportunities to bid. If bids are observable, the resulting dynamic-bidding game generates greater expected total welfare than if bids were sealed, for any given reserve price. Making early bids observable allows high-value bidders to signal their strength and deter others from entering the auction. Nonetheless, as long as the seller can commit to a reserve price, expected revenue is higher when bids are observable than when they are sealed.

Full Text

Duke Authors

Cited Authors

  • McAdams, D

Published Date

  • May 1, 2015

Published In

Volume / Issue

  • 157 /

Start / End Page

  • 959 - 972

Electronic International Standard Serial Number (EISSN)

  • 1095-7235

International Standard Serial Number (ISSN)

  • 0022-0531

Digital Object Identifier (DOI)

  • 10.1016/j.jet.2015.03.003

Citation Source

  • Scopus