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S Lowest Unique Bid Auctions with Signals
| Content Provider | Semantic Scholar |
|---|---|
| Author | Gallice, Andrea |
| Copyright Year | 2009 |
| Abstract | A lowest unique bid auction allocates a good to the agent who submits the lowest bid that is not matched by any other bid. This peculiar auction format is becoming increasingly popular over the Internet. We show that when all the bidders are rational such a selling mechanism can lead to positive pro ts only if there is a large mismatch between the auctioneers and the bidders valuation. On the contrary, the auction becomes highly lucrative if at least some bidders are myopic. In this second case, we analyze the key role played by the existence of some private signals that the seller sends to the bidders about the status of their bids. Data about actual auctions con rm the pro tability of the mechanism and the limited rationality of the bidders. JEL Classi cation: D44, C72. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.carloalberto.org/wp-content/uploads/2018/11/no.112.pdf |
| Alternate Webpage(s) | http://www.carloalberto.org/assets/working-papers/no.112.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
