- Second best efficiency in auctions
- Number of pages
- Valencia: Instituto Valenciano de Investigaciones Económicas
- IVIE working papers
- Volume | Edition (Serie)
- AD 2008-17
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
We characterize the incentive compatible allocation that maximizes the expected social surplus in a single-unit sale when the efficient allocation is not implementable. This allocation may involve no selling when it is efficient to sell. We then show that the English auction always implements the second best allocation when there are only two bidders, but not with more than two. Our model employs a unidimensional type space with independent types and allocative externalities, but captures some features of models with multidimensional types.
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