equilibrium reserve prices in sequential ascending auctions abstract we study a model where bidders have perfectly correlated valuations for two goods sold sequentially in two ascending price auctions the seller sets a reserve price before the beginning of each auction despite the lack of commitment by the seller we characterize an equilibrium and study its properties strategic non disclosure of information takes the form of non participation in the early auction by low valuation bidders while high valuation bidders bid up to their true valuations some buyers who would profitably buy at the reserve price refrain from participating in order to decrease the second auction reserve price

retailers and consumers in sequential auctions of collectibles we analyse an independent private value model where heterogeneous bidders compete for objects sold in sequential second price auctions in this heterogeneous game bidders may have differently distributed valuations and some have multi unit demand with decreasing marginal values retailers others have a specific single unit demand consumers by examining equilibrium bidding strategies and price sequences we show that the presence of consumers leads to more aggressive bidding from the retailers on average and heterogeneous bidders is a plausible explanation of the price decline effect the study of the expected revenue of the seller confirms the interest of auctioneers in inviting different types of bidders nous analysons un modele a valeurs privees independantes dans lequel des encherisseurs heterogenes sont en concurrence pour des objets vendus lors d encheres sequentielles au second prix dans ce jeu heterogene les encherisseurs tirent leurs evaluations de distributions qui peuvent differer et certains les revendeurs ont des demandes multi unitaires avec des evaluations marginales decroissantes alors que les autres les consommateurs ont une demande individuelle specifique l examen des strategies d equilibre et des sequences de prix montrent que la presence de consommateurs conduit en moyenne a des encheres plus agressives de la part des revendeurs et que la presence d encherisseurs heterogenes constitue une explication plausible a la decroissance des prix l etude de l esperance du revenu du vendeur confirme l interet des commissaires priseurs a inviter differentes categories d acheteurs

vertically differentiated simultaneous vickrey auctions theory and experimental evidence we study settings where a number of sellers simultaneously offer vertically differentiated vickrey auctions for imperfect substitute goods to unit demand buyers vertical differentiation can arise from differences in item quality item value certainty seller reliability or a combination of these factors we characterize the form of the bidding equilibria and derive expressions for the corresponding allocative efficiency and expected seller revenue when bidders are restricted to submit at most one bid our theory predicts the existence of a unique bayes nash equilibrium that resembles a form of probabilistic mating of likes allowing unit demand bidders to place an arbitrary number of bids induces complex strategy profiles where bidders place positive bids in all available auctions higher bidder types tend to follow more targeted strategies focusing their serious bids on fewer and generally higher quality auctions the nature of the bidding equilibria introduces allocative inefficiencies that arise from the lack of coordination in auction selection among bidders we test our theoretical propositions in a controlled laboratory experiment while also utilizing a domain specific risk score to help assess how the bidders risk type affects their bidding behavior in support of our theory we find evidence of a probabilistic assortative matching between bidder and auction types we also find that low risk type bidders tend to crowd on the highest auction and will pay a premium for the certainty it offers whereas high risk type bidders fail to appropriately adjust for risk associated with the lowest auction leading to overbidding these lead to an interesting focal anomaly whereby bids are concentrated on the highest and lowest auctions bypassing intermediate auctions

gathering information before signing a contract after being offered a contract an agent has the possibility to observe the state of nature this enables him to refuse the contract in unfavorable states but burdens him with an observation cost the authors show that the principal offers a contract in which the agent has no incentive to observe the state of nature and they explore its terms later they show that the principal finds it profitable to organize competition between several agents even though he has monopoly power and can push a single agent down to his reservation utility copyright 1992 by american economic association

emissions in a decarbonised economy global lessons from a carbon footprint analysis of iceland abstract decarbonisation of stationary energy supply particularly electricity grids is the current focus of climate change mitigation policy however studies have suggested that this narrow policy focus is insufficient to achieve meaningful global emissions reductions using iceland as a case study this paper demonstrates that significant emissions arise from transport and imported products which are often not fully captured in territorial ghg inventories this results in high greenhouse gas emissions per capita regardless of the nation s domestic energy supply the result is a low carbon illusion in which rich economies believe they are reducing their ghg responsibility whilst global emissions continue to grow this paper presents the first consumption based carbon footprint cbcf analysis for iceland a nation where the stationary energy supply is 99 renewable and could be viewed as a decarbonisation future case for rich nations globally the study combines icelandic household expenditure data with the multi regional input output database eora to calculate the cbcf of icelandic households the average annual cbcf of icelandic households was 10 4 tco2eq capita similar in magnitude to other eu nations despite iceland s unique energy supply ghg emissions from transport food and goods dominated the household cbcf the national cbcf was higher than most european nations and 55 higher than the territorial emissions inventory approximately 71 of household emissions were attributed to imported goods which were mapped globally revealing that the ghg emissions burden of icelandic consumption falls primarily on developing nations the findings suggest that a broader ghg accounting framework and resulting policy focus is required both in iceland and globally that incorporates both supply and demand based ghg reduction strategies

auctions and the price of art the value of most important works of art is established by public auction either directly by an actual sale or indirectly by reference to other sales how the auction system works is thus a critical determinant of how the public s preferences are translated into the evaluation of artistic work the auction system is central in the determination of the incentives for artistic work and the efficiency of the auction system is a key determinant of the cost of creating and distributing works of art this paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system actually works what it indicates about price formation and how well it performs we begin our discussion in section 2 with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics the first topic concerns how auction prices can be used to determine and compare overall price movements within the art market and other markets and the second topic concerns how the auction mechanism influences prices we

an optimal auction for complements abstract this paper considers the optimal selling mechanism for complementary items when buyers are perfectly symmetric the optimal procedure is to bundle the items and run a standard auction in general however bundling the items is not necessarily desirable and the standard auctions do not maximize revenue moreover the optimal auction allocation may not be socially efficient since the auction must discriminate against bidders who have strong incentives to misrepresent their true preferences journal of economic literature classification number d44

multi unit auctions with budget limits abstract we study multi unit auctions for bidders that have a budget constraint a situation very common in practice that has received relatively little attention in the auction theory literature our main result is an impossibility there is no deterministic auction that 1 is individually rational and dominant strategy incentive compatible 2 makes no positive transfers and 3 always produces a pareto optimal outcome in contrast we show that ausubel s clinching auction satisfies all these properties when the budgets are public knowledge moreover we prove that the clinching auction is the unique auction that satisfies all these properties when there are two players this uniqueness result is the cornerstone of the impossibility result few additional related results are given including some results on the revenue of the clinching auction and on the case where the items are divisible

market design with correlated valuations the effects of information on market design are explored in a simple setting where firms have private information about their correlated fixed costs and the government aims to maximize its expected revenue conditional on achieving efficient allocations government revenues are higher when the costs are less correlated or are more of a private value the reduced correlation increases the firms information rents but a change in the information structure also changes the expected market structures with positive effects on government revenues if the government faces the no deficit constraint there are situations where efficient allocations are achieved under asymmetric information but not under symmetric information

bottom fishing and declining prices in sequential auctions abstract we study standard sequential auctions in which the seller chooses the order of sale and right to choose auctions in which the winner chooses her preferred item from the remaining items empirically prices in sequential auctions tend to decline and sellers often hold right to choose auctions in our setting the right to choose format guarantees declining prices and efficiency in the standard auction a buyer may submit a low bid for the first item bottom fishing despite its being her less preferred item an example shows that the standard auction has declining prices is inefficient and gives lower expected revenue than the right to choose journal of economic literature classification numbers d44 d82

the social value of hidden information in adverse selection economies abstract when agents possess imperfect hidden knowledge at the time contracts are negotiated the social value of agents having access to additional hidden knowledge before contracts are implemented is positive to the extent that incentive constrained agents are sorted more finely but is negative to the extent that incentive constraining agents impose more stringent signalling requirements on others hence the intuition developed by hirshleifer 1971 marshall 1974 and milgrom and stokey 1982 that privately acquired information has neither positive nor negative social value when agents possess no prior hidden knowledge does not apply when agents possess imperfect hidden knowledge during contractual negotiations

the environmental effect of car free housing a case in vienna abstract a case control study of the car free model housing project in vienna was conducted to evaluate whether people living in this settlement have more sustainable lifestyles than people living in comparable buildings in vienna another aim was to identify the lifestyle characteristics and household activities which significantly influence the environmental impact of the residents of the car free housing project and a control group the control group referred to as the reference settlement was chosen from a nearby building complex with similar characteristics but without the car free feature household consumption patterns were estimated based on interviews in combination with data from the austrian consumer expenditure survey and the national accounts the evaluation of household environmental impacts uses emissions estimates from the austrian national accounting matrices including environmental accounts and data from life cycle assessments households from the car free settlement have substantially lower environmental impacts in the categories of ground transportation and energy use their co 2 emissions of these two categories are less than 50 of those living in the reference settlement the households in the car free settlement have somewhat higher emissions in the categories air transport nutrition and other consumption reflecting the higher income per capita as a result the co 2 emissions are only slightly lower than in the reference settlement but the emissions intensity is 20 lower both household groups have significantly lower environmental impacts than the austrian average reflecting less car use and cleaner heating energy in vienna

on some myths about sequenced common value auctions abstract equilibria are constructed for classes of game models of sequenced second price auctions having identical common valued objects in some of these the equilibrium price falls on average and in others the seller loses on average by committing to announce publicly something that he knows both of these possibilities are surprises journal of economic literature classification number d44

simultaneous auctions with synergies and common values abstract in this paper we study a simultaneous auction model with synergies common values and overlapping interests we construct strategies in which bidders of different types randomize over different bid intervals and provide necessary and sufficient conditions for such strategies to form symmetric equilibria questions about seller s revenue and efficiency are addressed journal of economic literature classification number d44

multi unit demand auctions with synergies behavior in sealed bid versus ascending bid uniform price auctions abstract we construct a relatively simple model of bidding with synergies and solve it for both open outcry and sealed bid uniform price auctions the essential behavioral forces involved in these auctions are 1 a demand reduction force resulting from the monopsony power that bidders with multiple unit demands have when synergies are relatively inconsequential and 2 bidding above stand alone values in order to capture significant complementarities between units the latter creates a potential exposure problem as bidders may win only parts of a package and earn negative profits bidding outcomes are closer to equilibrium in clock compared to sealed bid auctions however there are substantial and systematic deviations from equilibrium with patterns of out of equilibrium play differing systematically between the two auction formats these patterns of out of equilibrium play are analyzed along with their effects on revenue and efficiency

internet advertising and the generalized second price auction selling billions of dollars worth of keywords we investigate the generalized second price gsp auction a new mechanism used by search engines to sell online advertising although gsp looks similar to the vickrey clarke groves vcg mechanism its properties are very different unlike the vcg mechanism gsp generally does not have an equilibrium in dominant strategies and truth telling is not an equilibrium of gsp to analyze the properties of gsp we describe the generalized english auction that corresponds to gsp and show that it has a unique equilibrium this is an ex post equilibrium with the same payoffs to all players as the dominant strategy equilibrium of vcg

a household s burden the embodied resource use of household equipment in germany the paper describes patterns of resource use related to german households equipment using cluster analysis and material flow accounting data on socio demographic characteristics and expenditures on fuel electricity and household equipment allow for a differentiation of seven different household types the corresponding resource use expressed in material footprint per person and year is calculated based on cradle to gate material flows of average household goods and the related household energy use our results show that patterns of resource use are mainly driven by the use of fuel and electricity and the ownership of cars the quantified material footprints correlate to social status and are also linked to city size age and household size affluent established and or younger families living in rural areas typically show the highest amounts of durables and expenditures on non durables thus exhibiting the highest use of natural resources

optimal sequential auctions sequential sealed first price and open descending price procurement auctions are studied we examine which procurement auction rule achieves the low procurement cost we show that the answer to this policy question depends on whether the items are complements or substitutes with substitutes the first price procurement auction is preferred while with complements the open descending price procurement auction is preferred we also illustrate the procurement cost minimizing auction and the auction rule preferred by the bidders with substitutes bidders prefer the open descending price procurement auction while with complements bidders prefer the first price procurement auction

sequential auctions of heterogeneous objects abstract we consider sequential second price auctions in which heterogeneous objects are sold to bidders with unit demand and a single dimensional type we show that a symmetric increasing equilibrium exists if objects are ordered in terms of dispersiveness of value distributions equilibrium price declines when objects are equivalent on average and additional conditions hold

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

energy requirements of sydney households supporting the lifestyles of the populations of modern cities requires vast quantities of natural resources and leads to environmental stresses such as air and water pollution research into the metabolism of cities therefore aims at understanding the physical flows into within and out of cities with a view to reducing the use of resources and the environmental impacts one important physical indicator is energy use most studies on cities only consider direct or end user energy consumption since the function of cities is to serve the lives of their residents indirect energy use in cities or energy embodied in the consumption of goods and services by its residents can be regarded as being as important as direct energy use however physical models of cities are extremely complex and have difficulty in dealing with boundary issues and hence the indirect resource requirements in this paper we use input output analysis and detailed household expenditure data to yield comprehensive energy use breakdowns for the 14 statistical subdivisions of sydney multivariate regression and structural path analysis spa are used to interpret the results clear correlations can be drawn between energy use and income household size age and degree of urbanity the structural path analysis is used to demonstrate how significant differences in lifestyles between inner and outer areas of sydney leads to different energy use characteristics this final consumption based approach to analysing the energy requirements for households has important implications for measures aimed at reducing energy use which tend to only consider direct energy use d 2004 elsevier b v all rights reserved

the role of social processes for sustainable consumption abstract rethinking the role consumption plays in individual well being and societal development is key for addressing pressing environmental problems we perceive the need to envision consumption as a social activity which requires the active engagement of consumers in order to better enhance their quality of life the paper focuses on the framework of product service systems one particular programme for more sustainable consumption after reviewing the potential benefits and limitations of this programme we explore the opportunities to learn from participatory and community based strategies like lets

climate change mitigation potential of norwegian households and the rebound effect abstract an increasing number of studies show that efficiency improvements alone will not be sufficient to attain the substantial emission reductions needed to mitigate global warming to a target of 2 c consumption side changes are likely to be needed to achieve sufficient emission reductions the united nations emphasize the importance of developed countries taking the lead in lowering emissions to achieve the sustainable development goals this paper assess to what extent norwegian households can lower their carbon footprint consistent with territorial emission reductions towards the 2 c target of global warming through implementing a set of behavioral actions we evaluate the efficacy of the set of actions both initially and after considering rebound effects a multiregional environmentally extended input output database is linked with the norwegian consumer expenditure survey to analyze both average and marginal expenditure per unit of increased income further linear programming is applied to examine the changes needed by households to reach different emission reduction targets we find that households implementing the full set of actions without re spending can obtain a 58 decrease in their carbon footprint when accounting for the effect of re spending this reduction drops to 24 35 which is not within the requirements of the 2 c target the optimization analysis suggests households can achieve reductions up to 45 by restricting re spending to specific goods and services this indicates that curbing the rebound effect is key to achieving real reductions in household carbon footprints we show that changing consumption patterns can significantly contribute to lowering anthropogenic greenhouse gas emissions without compromising the level of economic activity

segmenting the market the monopolist s optimal product mix abstract in an industry producing products which differ in quality to consumers who vary in their willingness to pay it may happen that only a bounded number of producers can coexist at noncooperative price equilibrium in other words the industry is a natural oligopoly we are here concerned with a special example in which only one producer can survive our focus of interest in the present paper is to examine this monopolist s optimal product range depending on the dispersion of consumers willingness to pay income either i the monopolist will find it optimal to segment the market completely offering the maximum number of products permitted or ii the monopolist will offer only a single product the precise nature of this switch of policy which occurs at a certain critical distribution of consumer incomes willingness to pay is explored fully

declining prices in sequential auctions with complete revelation of bids abstract in a sequential auction setting the expected winning prices are shown to decline across two stages when all bids are revealed between the stages the prices decline because bidders desire to hide their private valuation information the hiding also leads to inefficient allocations

sequential auctions of stochastically equivalent objects abstract we show that in sequential auctions of a large enough number of stochastically equivalent objects with bounded values prices will on average have a downwards trend

information control in the principal agent problem this paper compares the principal s payoff in agency models under different assumptions about the agent s access to information the agent may make decisions before is uninformed or after is informed learning the state of nature when there are two possible outcomes the principal typically prefers informed to uninformed agents whether the agent receives the information before or after contracting this result is false when there are more than two outcomes conditions under which a principal prefers one agent to another when the agents differ only in their disutility of effort are also given copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

forward looking behavior in ecb liquidity auctions evidence from the pre crisis period abstract using data from the pre crisis period we investigate banks joint bidding behavior in the ecb s main refinancing operations mro and longer term refinancing operations ltro we test whether banks bid at lower rates in mros before the ltro and at higher rates after the ltro compared to other operations we motivate this by findings from the auction literature suggesting that agents bidding behavior is forward looking and takes sequences of future auctions into account we offer two findings first we find that in general banks bid in the mro before the ltro at lower rates as compared to other mros moreover mro participants that also bid in the following ltro bid at even lower rates compared to peers not bidding in the ltro these findings support the hypothesis that banks view obtaining liquidity from the two operations as a substitute second we find that banks generally bid more aggressively in the mro after the ltro banks that participated also in the ltro preceding the mro bid at substantially higher rates these findings reflect that short banks with potentially large net liquidity needs in the mro after the ltro bid more aggressively although size plays a considerable role for bidding behavior the conclusions are valid for banks of different sizes

buy prices in online auctions irrationality on the internet abstract buy prices are puzzling it makes sense for a seller at auction to set a minimum bidding level i e a reserve price surely but a maximum we explore the use of maximum bidding levels buy prices in online auctions and provide a rational explanation for this seemingly irrational auction mechanism we show that augmenting an english auction with a buy price can improve the seller s profits by partially insuring and therefore increasing the expected payment from some risk averse bidders perhaps more surprising is that the english auction augmented with a buy price can also be superior even to the first price sealed bid and dutch auctions when bidders are risk averse

the declining price anomaly in dutch dutch rose auctions in symmetric independent private value auctions of a single object with risk neutral bidders the english second price auction has strategic simplicity it is optimal for bidders to reveal their valuation of the object and make bids accordingly in that case the auction is won by the person with the highest valuation who pays a price equal to the second highest valuation in a dutch first price auction this simplicity vanishes here winning bidders have to pay their bid to make a profit they shade their bids and bid below their valuation of the object somewhat loosely one may state that an english auction is truth revealing whereas a dutch auction requires strategic behavior the simple structure of the one unit english auction vanishes if two identical objects are auctioned sequentially now in the first round it is optimal for bidders to shade their bids to account for the option value of participating in the subsequent second round robert j weber 1983 bidders with a higher valuation also have a higher option value therefore they shade their bids in the first round by a greater amount than do bidders with a lower valuation as the auction proceeds the number of bidders decreases over the sequence of auctions the number of objects decreases as well the first fact has a negative effect on the competition for an object and the second has a positive effect both effects cancel out and prices follow a martingale as a result all gains to waiting are arbitraged away and the expected prices in both rounds are the same the latter result also holds for sequential auctions of more than two objects and does not depend on whether the auction is english or dutch this neat theoretical result is not supported by empirical research which usually finds price declines orley ashenfelter 1989 found a mild price decrease in sequential auctions of identical units of wine mcafee and daniel vincent 1993 also present empirical evidence on sequential wine auctions they found that on average the second unit of wine was sold at a price 1 4 percent lower than the price of the first unit victor ginsburgh 1998 uses data from wine auctions in which the auctioneer acted as an agent for bidders who were not present at the auction he found price declines but apparently the absent bidders entered bids that did not fit with the theory empirical studies by ashenfelter and david genesove 1992 see also jean jacques laffont 1997 and alan beggs and kathryn graddy 1997 concern heterogeneous objects they also detected price declines because of the contradiction between theory and empirical studies the declining price phenomenon is regarded to be an anomaly

from ownership to service use lifestyle the potential of car sharing abstract the shift from ownership to service use often promoted in concepts of sustainability has recently become available in private vehicle mobility currently 38 000 people in a number of european cities are participating this example is used here to analyze the characteristics of people sharing one material product as well as to investigate which services they actually render different views on the latter imply different evaluations of the size of the market potential and different conclusions on the effectiveness of various policy instruments when service use is a separate lifestyle policy instruments have to ultimately foster it directly rather than changing economic costs at the margin only

bidding behavior at sequential first price auctions with out supply uncertainty a laboratory analysis abstract we report on a series of experiments that test the effects of an uncertain supply on bidding behavior and prices in sequential first price auctions with private independent values and unit demands supply is assumed uncertain when buyers do not know the exact number of units to be sold i e the length of the sequence we observe an important overbidding in all but the last stage of a sequence no matter whether supply is certain and a non monotone behavior when supply is certain yet the data qualitatively support most stage to stage bid predictions and the price trend predictions for risk neutral bidders

sequential auctions with informational externalities and aversion to price risk decreasing and increasing price sequences a large body of empirical research has shown that prices of identical goods sold sequentially sometimes increase and often decline across rounds this article introduces a tractable form of risk aversion called aversion to price risk and shows that declining prices arise naturally when bidders are averse to price risk when there are informational externalities there is a countervailing effect which pushes prices to raise along the path of a sequential auction even if bidder s signals are independent the article shows how to decompose the effect of aversion to price risk from the effect of informational externalities

research note optimal selling in dynamic auctions adaptation versus commitment this paper analyzes optimal selling strategies of a monopolist facing forward looking patient unit demand bidders in a sequential auction market such a seller faces a fundamental choice between two selling regimes adaptive selling that involves learning about remaining demand from early prices and commitment selling that forgoes such learning and makes all selling decisions in the beginning of the game a model of the game between the seller and the bidders is proposed to characterize the optimal regime choice the model implies that the relative profitability of the two regimes depends on the expected gains from trade when the expected gains from trade are low commitment dominates adaptation and vice versa

self confirming price prediction strategies for simultaneous one shot auctions abstract bidding in simultaneous auctions is challenging because an agent s value for a good in one auction may depend on the outcome of other auctions that is bidders face an exposure problem previous works have tackled the exposure problem with heuristic strategies that employ probabilistic price predictions so called price prediction strategies we introduce a concept of self confirming prices and show that within an independent private value model bayes nash equilibrium can be fully characterized as a profile of optimal price prediction strategies with self confirming prices we operationalize this observation by exhibiting a practical procedure to compute near self confirming price predictions given a price prediction strategy an extensive empirical game theoretic analysis demonstrates that bidding strategies that use such predictions are effective in simultaneous auctions with both complementary and substitutable preference structures in particular we produce one such strategy that finds near optimal bids thereby outperforming all previously studied bidding heuristics in these environments

bundle size pricing as an approximation to mixed bundling multiproduct firms can set separate prices for all possible bundled combinations of its products mixed bundling however this is impractical for firms with more than a few products because the number of prices increases exponentially with the number of products we find that simple pricing strategies are often nearly optimal specifically we show that bundle size pricing setting prices that depend only on the size of bundle purchased tends to be more profitable than offering the individual products priced separately and tends to closely approximate the profits from mixed bundling jel d24 d42 l11 l13 l25

the declining price anomaly abstract data from wine auctions indicate that identical products sold sequentially typically follow a decreasing pattern of prices known as the declining price anomaly this is explained for both first and second price auctions by appealing to risk averse bidders earlier bids are then equal to expected later prices plus a risk premium associated with the risky future price we show that this logic rests on the assumption of nondecreasing absolute risk aversion which is necessary for pure strategy equilibrium bidding functions to exist thus decreasing absolute risk aversion implies ex post inefficiency with positive probability data from wine auctions are used to confirm the existence of the declining price anomaly journal of economic literature classification numbers d43 d44 d81 d82 l81

optimal dynamic mechanism design and the virtual pivot mechanism we consider the problem of designing optimal mechanisms for settings where agents have dynamic private information we present the virtual pivot mechanism which is optimal in a large class of environments that satisfy a separability condition the mechanism satisfies a rather strong equilibrium notion it is periodic ex post incentive compatible and individually rational we provide both necessary and sufficient conditions for immediate incentive compatibility for mechanisms that satisfy periodic ex post incentive compatibility in future periods the result also yields a strikingly simple mechanism for selling a sequence of items to a single buyer we also show that the allocation rule of the virtual pivot mechanism has a very simple structure a virtual index in multiarmed bandit settings finally we show through examples that the relaxation technique we use does not produce optimal dynamic mechanisms in general nonseparable environments

impact of household consumption on co2 emissions danish household consumption increased by 58 over the period 1966 1992 while co2 emissions only increased by 7 using decomposition analysis we investigated the global co2 impact of danish household consumption from 1966 to 1992 our conclusion is that overall growth in private consumption but not changes in the composition of consumption is the key to understanding the increase in co2 emissions however the effect of growth in private consumption has been partly offset by substantial energy conservation in the energy supply and manufacturing sectors

how auctions work for wine and art interview auctioneers and even to buy a little wine in the meantime i have also had the opportunity with john abowd 1988 to observe and collect data on the auction sale of impressionist and contemporary paintings this paper reports on some of the empirical regularities that i and others have observed in the actual operation of the auction markets for these items in view of the rich and diverse array of theoretical literature on auctions it seems high time economists began to spell out precisely what facts it is meant to explain 2

sequential auctions with randomly arriving buyers we analyze a dynamic market in which buyers compete in a sequence of private value auctions for differentiated goods new buyers and new objects may arrive at random times since objects are imperfect substitutes buyers values are not persistent instead each buyer s private value for a new object is a new independent draw from the same in this paper we consider a model of dynamic markets in which buyers and sellers arrive randomly to the market and examine the equilibrium behavior of market participants in response to these arrivals in particular we investigate the role of current and anticipated future market conditions in determining endogenous outside options in this setting we characterize the influence of these outside options on equilibrium price determination and study the manner in which equilibrium payoffs and behavior are affected by both current conditions and future dynamics in our model buyers face an infinite sequence of auctions for heterogeneous but stochastically equivalent objects each buyer s private value for a new object is a new independent draw from a fixed distribution that arrive at random times moreover new buyers probabilistically arrive on the market in each period thus in any given auction buyers are presented with the outside option of participating in a future auction for an imperfectly substituted equivalent object but with a potentially different number of competitors we describe the unique symmetric markov equilibrium of this model by deriving a precise characterization of this option value

supplying information to facilitate price discrimination the authors examine the incentive of a seller to allow potential buyers to acquire private information about their tastes for the seller s product improved private information for buyers enables the seller to segment the market and charge higher prices to high value buyers however improved information can also provide rents to buyers in a variety of settings this tradeoff is optimally resolved at one of two extremes either buyers are supplied with the best available knowledge of their tastes or no information is supplied by the seller copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

scale economies and the dynamics of recurring auctions we analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects either economies or diseconomies of scale we show that economies of scale give rise to declining expected equilibrium prices whereas the converse is not generally true moreover first and second price auctions are not always revenue equivalent economies of scale make second price auctions more profitable for the seller whereas revenue equivalence may be preserved in the case of diseconomies

food and life cycle energy inputs consequences of diet and ways to increase efficiency food consumption is one of the most polluting everyday activities when impacts during product life cycles are considered greenhouse gas emissions from the food sector are substantial and need to be lowered to stabilise climate change here we present an inventory of life cycle energy inputs for 150 food items available in sweden and discuss how energy efficient meals and diets can be composed energy inputs in food life cycles vary from 2 to 220 mj per kg due to a multitude of factors related to animal or vegetable origin degree of processing choice of processing and preparation technology and transportation distance daily total life cycle energy inputs for diets with a similar dietary energy consumed by one person can vary by a factor of four from 13 to 51 mj current swedish food consumption patterns result in life cycle energy inputs ranging from 6900 to 21 000 mj per person and year choice of ingredients and gender differences in food consumption patterns explain the differences up to a third of the total energy inputs is related to snacks sweets and drinks items with little nutritional value it is possible to compose a diet compatible with goals for energy efficiency and equal global partition of energy resources however such a diet is far from the swedish average and not in line with current trends

design and marketing of financial products marketing costs are introduced into the security design environment outlined in allen and gale 1988 it is shown that splitting the firm s cash flow between products enhances their investor appeal and reduces marketing costs we also explain how the extremal product design in allen and gale is thereby avoided and how in simple cases debt equity or warrants can be optimal furthermore we illustrate in general terms how the optimal solution employs portfolios of option type products and we give an example of two optimal products that share profits in seven of eight states article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

ghg reduction potential of changes in consumption patterns and higher quality levels evidence from swiss household consumption survey abstract an effective consumer oriented climate policy requires knowing the ghg reduction potential of sustainable consumption the aim of this study is to draw lessons from differences in consumption between households with high and low ghg emissions we evaluate a survey of 14 500 households and use a method that allows measuring changes in price level of consumption comparing the 10 of households with the highest ghg emissions per capita with the lowest 10 controlling for differences in expenditure level and household structure we find a range 5 17 tons of co2 equivalent per capita and year the observed differences stem mainly from heating electricity use car use and travel by aircraft consumption patterns with low ghg emissions are characterized by less spending on mobility but more on leisure and quality oriented consumption leading to higher prices per unit further characteristics are a higher share of organic food low meat consumption and fewer detached single family houses our findings imply that a significant reduction in ghg emissions would be possible by adopting real world consumption patterns observable in society the twin challenge is to shift consumption towards more climate friendly patterns and to prevent any trend towards high emitting consumption patterns

optimal bundling strategies in multiobject auctions of complements or substitutes we consider a problem at the interface of auctions and bundling our revenue maximizing seller seeking to auction one unit each of two complements or substitutes in the best of three formats the auction of the bundle separate auctions of the individual items and a combinatorial auction we draw on an analytical model to address the following questions i which of the auctioning strategies is optimal under the second price sealed bid format ii what is the optimal strategy for the bidders iii when the objects are asymmetrically valued e g super bowl ticket versus souvenir what is the optimal auctioning sequence under the pure components strategy our results suggest that separate auctions of the two objects are superior to the auction of the bundle for most substitutes and even moderate complements when there are at least four bidders the auction of the pure bundle is better suited for strong complements or with too few bidders when the combinatorial auction is an available option it weakly dominates the auction of the pure bundle but has domains of inferiority relative to the separate auctions when the objects are asymmetric in value it is optimal to auction the higher valued object first

complements and substitutes in sequential auctions the case of water auctions we use data on sequential water auctions to estimate demand when units are com plements or substitutes a sequential english auction model determines the estimating structural equations when units are complements one bidder wins all units by paying a high price for the first unit thus deterring others from bidding on subsequent units when units are substitutes different bidders win the units with positive probability paying prices similar in magnitude even when the same bidder wins all units we re cover individual demand consistent with this stark pattern of outcomes and confirm it is not collusive but consistent with non cooperative behavior demand estimates are biased if one ignores these features

an equilibrium analysis of the simultaneous ascending auction we provide a bayes nash equilibrium analysis of the simultaneous ascending auction saa when local bidders interested in a single item compete against global bidders interested in aggregating many items we first assume that each local bidder values only a specific item e g the license for the region where it has monopoly power and that global bidders valuation functions are convex for this environment we show that a global bidder faces an exposure problem with adverse consequences for revenue and efficiency in the limit when the number of items grows large the saa is revenue and efficiency equivalent to the vickrey clarke groves vcg mechanism we extend our analysis to include the case where items are substitutes for local bidders so that price arbitrage will occur as observed in many spectrum auctions this environment which combines substitutes and complements results in an aggravated exposure problem consequently the saa is no longer efficient and may yield dramatically lower revenues than the vcg mechanism finally we relax the assumption that global bidders valuation functions are convex by considering an environment with medium sized global bidders who demand fewer than all items we show that global bidders divide the market at low prices when market sharing is feasible while they engage in mutually destructive bidding when there is a fitting problem in both cases the saa again underperforms relative to the vcg mechanism

repeated auctions with budgets in ad exchanges approximations and design ad exchanges are emerging internet markets where advertisers may purchase display ad placements in real time and based on specific viewer information directly from publishers via a simple auction mechanism advertisers join these markets with a prespecified budget and participate in multiple second price auctions over the length of a campaign this paper studies the competitive landscape that arises in ad exchanges and the implications for publishers decisions the presence of budgets introduces dynamic interactions among advertisers that need to be taken into account when attempting to characterize the bidding landscape or the impact of changes in the auction design to this end we introduce the notion of a fluid mean field equilibrium fmfe that is behaviorally appealing and computationally tractable and in some important cases it yields a closed form characterization we establish that an fmfe approximates well the rational behavior of advertisers in these markets we then show how this framework may be used to provide sharp prescriptions for key auction design decisions that publishers face in these markets in particular we show that ignoring budgets a common practice in this literature can result in significant profit losses for the publisher when setting the reserve price this paper was accepted by dimitris bertsimas optimization

three object two bidder simultaneous auctions chopsticks and tetrahedra symmetric equilibria are constructed for a class of symmetric auction games the games all have two identical bidders bidding in three simultaneous first price sealed bid auctions for identical objects information is complete and the bidders marginal valuations increase for the second object and then decrease for the third in all cases the support of the mixture that generates the equilibrium is two dimensional and it surrounds a three dimensional set of best responses this appears to be a previously unknown structure

beyond chopsticks symmetric equilibria in majority auction games majority auction games are simultaneous sealed bid auctions of identical objects among identical bidders who each want to win a specified fraction more than a half of the objects each bidder receives no benefit from winning less than the specified fraction and no additional benefit from winning more than it symmetric equilibria having simple intuitive forms are shown to exist in first price second price and all pay versions of such games when the number of bidders is sufficiently large this contrasts with earlier results for the two bidder pure chopstick majority auction games where the only known equilibria are more complicated

modeling competitive bidding a critical essay in analyzing bidding modeling matters this paper is a critical analysis of the models available to aid competitive bidding decision making bidding strategy and auction design in real transactions after an introductory overview this paper describes the contexts in which auctions arise reviews the mainstream theory of single isolated auctions and discusses the important work involved in enrichment of this theory in doing so it indicates results that have been obtained and the sort of changes in analytical approach that are needed to tackle other critical enrichments the paper summarizes briefly what is known about the direct use of models by bidders and auction designers a general theme of this paper is that enriched models are needed to bring bidding theory closer to direct applicability in decision making

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

optimal information disclosure in auctions and the handicap auction we analyze a situation where a monopolist is selling an indivisible good to risk neutral buyers who only have an estimate of their private valuations the seller can release without observing certain additional signals that affect the buyers valuations our main result is that in the expected revenue maximizing mechanism the seller makes available all the information that she can and her expected revenue is the same as it would be if she could observe the part of the information that is new to the buyers we also show that this mechanism can be implemented by what we call a handicap auction in interesting applications in the first round of this auction each buyer picks a price premium from a menu offered by the seller a smaller premium costs more then the seller releases the additional signals in the second round the buyers bid in a second price auction where the winner pays the sum of his premium and the second highest non negative bid in the case of a single buyer this mechanism simplifies to a menu of european call options

sequential auctions price trends and risk preferences abstract we analyze sequential auctions in a general environment where bidders are heterogeneous in risk exposures and exhibit non quasilinear utilities we derive a pure strategy symmetric equilibrium for the sequential dutch and vickrey auctions respectively with an arbitrary number of identical objects for sale when bidders are risk averse preferring the equilibrium price sequences must be downward upward drifting the declining price anomaly is thus evidence of bidder risk aversion in this general environment these results derive from a key assumption that bidders marginal utilities are log supermodular in payment and type

engel functions panel data and latent variables a system of consumer expenditure functions is estimated from norwegian household budget data specific features of the approach are i panel data from individual households are used which offer far richer opportunities for identification estimation and testing than cross section data ii measurement errors are carefully modelled total consumption expenditure is modelled as a latent variable purchase expenditures on different goods and two income measures are used as indicators of this basic latent variable the usual assumption of no measurement error in total expenditure is clearly rejected iii the distribution of latent total expenditure across households and its evolution over time is estimated and important properties tested iv the distribution of individual differences in preferences represented by individual time invariant latent variables are modelled estimated and tested v we test the hypothesis that preferences are uncorrelated with total consumption expenditure which is basic to virtually all cross section studies of consumer demand functions

testing for price anomalies in real estate auctions this paper reports on the results of an auction sale of 83 condominium apartment units in new jersey at the auction every unit was hammered down but unknown to the 2 348 registered bidders 40 of the sales fell through prices in the subsequent sale of condominium units in face to face negotiations resulted in identical units selling for 13 less than they fetched at auction and the discount was largest for those units hammered down early in the auction these results are inconsistent with the usual predictions from the theory of common value auctions and suggest that uninformed bidders in this auction may have been the subject of a winner s curse which generated considerable profit for the seller this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from ano this abstract was borrowed from another version of this item

robust auctions for revenue via enhanced competition in robust auctions for revenue via enhanced competition t roughgarden i talgam cohen and q yan revisit the classic bulow klemperer result this result compares the revenues of two well know

a comparison of standard multi unit auctions with synergies in an example with two objects and four bidders some of which have superadditive values we characterize the equilibria of a simultaneous ascending auction and compare the revenue and efficiency generated with ones generated by the sequential the one shot simultaneous and the vickrey clarke groves auctions

simultaneous use of auctions and posted prices abstract i consider a model in which several identical objects are sold simultaneously via an auction and a posted price mechanism the model explains several empirical regularities regarding bidding behavior in ebay auctions such as the finding that some bidders bid multiple times over the course of the auction and that bidders tend to bid with greater frequency near the end of the auction than the beginning i also show that sellers prefer to simultaneously use auctions and posted prices than to use either mechanism individually

optimal auctions revisited in symmetric privately known values oral auctions with costly entry for bidders the seller can do no better than by committing ex ante to a reservation price and entry fees or subsidies which result in no fewer and at most one more bidders than a reservation price equal to the seller s value would in the absence of entry fees or subsidies journal of economic literature classification numbers d44 c72

catalogue vs order of sale effects in sequential auctions theory and evidence from a rare book sale we examine bidding in a rare book sequential auction that has features of a natural experiment lots were arranged in alphabetical order the reserve set non strategically and half the bids placed by mail in bidders we distinguish between the effects induced by the print order of the catalogue from those by the sequential nature of the sale we document the existence of distinct catalogue effects on prices number of bids and price variability and determine their causes we demonstrate that these catalogue effects also influence floor bidder behaviour we derive a theoretical model that generates key aspects of floor bidder behaviour copyright 2004 royal economic society

institutionalisation of sustainable consumption patterns based on shared use the product service system pss concept has been proposed as a way of dealing with unsustainable patterns of consumption in the business to consumer b2c domain existing alternatives to traditional consumption based on ownership such as car sharing communal washing centres and tool sharing schemes indicate that more sustainable patterns of consumption may be found for other household functions however the low profile of these examples in society and on the market calls for a query into factors that may facilitate or hinder broader acceptance of more sustainable alternatives in this study the aforementioned examples are analysed from institutional and product service system perspectives and it is suggested that the embodiment of alternative consumption patterns into every day routines depends on institutional arrangements regulatory and normative on how the product service systems are designed and applied in practice and oil the socio cultural background of the society the systems are implemented in c 2004 elsevier b v all rights reserved less

a theory of clearance sales clearance sales are widely used by firms as an intertemporal selling policy in particular in markets where firms face demand uncertainty and need to choose capacity in advance clearance sales consist in charging a high price initially but then lowering the price in the sales period high valuation consumers purchase the good at the high initial price so as to avoid rationing at the low price while low valuation consumers wait for the price to drop we develop a simple model of intertemporal monopoly pricing under demand uncertainty and show that clearance sales may be the optimal intertemporal selling policy

equilibrium price paths in sequential auctions with stochastic supply abstract in many sequential auctions supply is unknown ex ante consequently price formation depends on information regarding supply uncertain supply reduces the option value and yields declining prices however prices increase if it becomes known that supply falls short of expectations

synergies in recurring procurement auctions an empirical investigation this article examines the impact of synergies on bidder behavior in recurring road construction procurement auctions the study reveals that projects are spatially correlated when bidders with potential synergies participate the results indicate that their probability of bidding and winning increases and they bid more aggressively finally the study shows that a firm that is capacity unconstrained will bid more aggressively than one that is capacity constrained

buy it now or take a chance price discrimination through randomized auctions increasingly detailed consumer information makes sophisticated price discrimination possible at fine levels of aggregation demand may not obey standard regularity conditions we propose a new randomized sales mechanism for such environments bidders can buy it now at a posted price or take a chance in an auction where the top d 1 bidders are equally likely to win the randomized allocation incentivizes high valuation bidders to buy it now we analyze equilibrium behavior and apply our analysis to advertiser bidding data from microsoft advertising exchange in counterfactual simulations our mechanism increases revenue by 4 4 and consumer surplus by 14 5 compared to an optimal second price auction this paper was accepted by assaf zeevi stochastic models and simulation

jump bidding and overconcentration in decentralized simultaneous ascending auctions abstract a model of english auctions is proposed to incorporate the possibility of jump bidding when two objects are sold separately via such auctions bidders signal their willingness to pay via jump bids thereby forming rational expectations of the prices without relying on any central mediator hence a multi item bidder does not suffer the exposure problem of having to buy an item while he is uncertain about the price of its complement single item bidders however free ride one another in competing against a multi item bidder consequently the auctions overly concentrate the goods to a multi item bidder and never overly diffuse them to single item bidders

auctions with synergies and asymmetric buyers in this paper we consider sequential auctions with synergies where one player wants two objects and the remaining players want one object each we show that expected prices may not necessarily decrease as predicted by branco econ lett 54 1997 159 indeed we show that expected prices can actually increase c 2004 elsevier b v all rights reserved

information incentives and organizational mode we examine the choice of organizational mode for a two stage production process wherein cost realizations at each stage are observed only by the producing party when these costs are positively correlated the principal prefers to undertake second stage production herself when the correlation is negative and sufficiently small she will prefer that the agent who performs the first stage also perform the second for large negative correlation either mode might be preferred when costs are uncorrelated the principal is indifferent between modes

income effects and the inconvenience of private provision of public goods for bads the case of recycling in finland abstract absent or weak income effects reported in many contingent valuation studies have cast doubt on the reliability of the survey method we find that the income effect depends on the type of public good in question there is a negative income effect for willingness to pay for recycling which requires time and effort for sorting but a positive effect for the more convenient incineration hence high income low income individuals may display less more effort on environmental behavior this stresses the importance of comprehensive distributional analyses when assessing alternative environmental policies

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

sequential auctions for stochastically equivalent complementary objects abstract this paper considers equilibrium prices in sequential auctions for complementary objects when objects are stochastically equivalent expected prices may not necessarily decrease as predicted by models with identical objects

sequential auctions with synergies an example abstract an equilibrium in an example of a two unit sequential ascending price auction where some bidders have superadditive values is presented the equilibrium is in pure strategies in equilibrium the expected price declines from the first to the second auction