第17章讲义 拍卖.pptVIP

Common-Value Auctions If every bid is truthful, the winner is the bidder with the largest estimation error -- call it If then a truthful winner on average pays more than the true value -- the winner’s curse. So bids should on average be less than in a common-value auction. Chapter Seventeen Auctions Who Uses Auctions? Owners of art, cars, stamps, machines, mineral rights etc. Q: Why auction? Who Uses Auctions? Owners of art, cars, stamps, machines, mineral rights etc. Q: Why auction? A: Because many markets are imperfect and it is hard to discover potential buyers’ true valuations of your asset. Auctions help to discover this information. Types of Auctions English auction: bids are public announcements bid price rises until there are no further bids highest bid wins winner pays his bid. Types of Auctions Sealed-bid first-price auction: bids are private information bids are made simultaneously highest bid wins winner pays his bid. Types of Auctions Sealed-bid second-price auction: bids are private information bids are made simultaneously highest bidder wins winner pays second-highest bid also known as a Vickrey auction. Types of Auctions Dutch auction: auctioneer announces a high bid and then gradually lowers the bid first buyer to accept wins and pays that price. Reserve Price A seller specified bid level below which no sale is made. Economists’ Classification of Auctions Private-value auctions: every potential buyer knows for sure her own valuation of the item for sale all these individual valuations are independent of each other. Economists’ Classification of Auctions Common-value auctions: item for sale has the same value to every potential buyer potential buyers differ in their own estimates of this common value. Auction Design Goals: Pareto efficiency maximization of the seller’s profit. Auction Design Pareto efficiency: the item must sell to the buyer with the highest valuation of the item. Which auctions are Pareto effici