On Second Price Auctions and Imperfect Competition

14 Pages Posted: 25 Nov 2007

See all articles by Patrick W. Schmitz

Patrick W. Schmitz

University of Cologne; Centre for Economic Policy Research (CEPR)

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Date Written: April 2008

Abstract

Consider two sellers each of whom has one unit of an indivisible good and two buyers each of whom is interested in buying one unit. The sellers simultaneously set reserve prices and use second price auctions as rationing device. An equilibrium in pure strategies where each seller has a regular customer is characterized. The result is applied in order to demonstrate that not allowing sellers to use second price auctions may enhance total surplus.

Suggested Citation

Schmitz, Patrick W., On Second Price Auctions and Imperfect Competition (April 2008). Available at SSRN: https://ssrn.com/abstract=1032137 or http://dx.doi.org/10.2139/ssrn.1032137

Patrick W. Schmitz (Contact Author)

University of Cologne ( email )

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Cologne, 50923
Germany

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Centre for Economic Policy Research (CEPR)

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