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Optimal sequential auctions

Jofre-Bonet, M. & Pesendorfer, M. (2014). Optimal sequential auctions. International Journal of Industrial Organization, 33(1), pp. 61-71. doi: 10.1016/j.ijindorg.2014.02.002


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.

Publication Type: Article
Additional Information: © 2014, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
Publisher Keywords: Complementarities; Optimal auctions; Sequential auctions; Substitutes
Subjects: H Social Sciences > HB Economic Theory
Departments: School of Policy & Global Affairs > Economics
SWORD Depositor:
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