Second best efficiency in auctions

Authors
Publication date 2008
Series IVIE working papers, AD 2008-17
Number of pages 58
Publisher Valencia: Instituto Valenciano de Investigaciones Económicas
Organisations
  • Faculty of Economics and Business (FEB) - Amsterdam School of Economics Research Institute (ASE-RI)
Abstract 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.
Document type Report
Published at
Permalink to this page
Back