Auctions with Private Entry Costs

25 Pages Posted: 25 Nov 2003

See all articles by Todd R. Kaplan

Todd R. Kaplan

University of Exeter Business School - Department of Economics; University of Haifa - Department of Economics

Aner Sela

Ben-Gurion University of the Negev - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: October 2003

Abstract

We study auctions where bidders have private information about their entry costs and the seller does not benefit from these entry costs. We consider a symmetric environment where all bidders have the same value for the object being sold, and also an asymmetric environment where bidders may have different valuations for the object. In these environments, the seller's pay-off as well as the social surplus may either increase or decrease in the number of bidders though not necessarily in the same direction. The auction designs that maximize the social surplus or the seller's pay-off are analysed.

Keywords: Symmetric auctions, asymmetric auctions, entry costs

JEL Classification: D44, O31, O32

Suggested Citation

Kaplan, Todd R. and Sela, Aner, Auctions with Private Entry Costs (October 2003). Available at SSRN: https://ssrn.com/abstract=472922

Todd R. Kaplan

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom
+44 13 9226 3237 (Phone)

University of Haifa - Department of Economics

Haifa 31905
Israel

Aner Sela (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+972 8 647 2309 (Phone)
+972 8 647 2941 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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