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  4. May 2015
  5. Becoming the Neighbor Bidder: Endogenous Winner's Curse in Dynamic Mechanisms

Becoming the Neighbor Bidder: Endogenous Winner's Curse in Dynamic Mechanisms

  • Alejandro Francetich
American Economic Journal: Microeconomics
vol. 7, no. 2, May 2015
(pp. 45-76)
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Abstract

This paper addresses the problem of sequentially allocating time sensitive goods, or one-period leases on a durable good, among agents who compete through time and learn about the common component of their valuation privately through experience. I show that efficiency is unattainable, and I identify simple variations of sequential second price or English auctions that implement the second best and the revenue-maximizing auctions. When the units are divisible, I identify the corresponding auctions that allow for double sourcing. (JEL D44, D82)

Citation

Francetich, Alejandro. 2015. "Becoming the Neighbor Bidder: Endogenous Winner's Curse in Dynamic Mechanisms." American Economic Journal: Microeconomics, 7 (2): 45-76. DOI: 10.1257/mic.20130226

Additional Materials

JEL Classification

  • D44 Auctions
  • D82 Asymmetric and Private Information; Mechanism Design
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