Affiliated Common Value Auctions with Costly Entry

Thumbnail Image

Files

BIZ_Murto_Valimaki_Affiliated_common_value_auctions_with_costly_Entry_2025.pdf (941.45 KB)

Access rights

openAccess
CC BY
publishedVersion

URL

Journal Title

Journal ISSN

Volume Title

A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
This publication is imported from Aalto University research portal.
View publication in the Research portal (opens in new window)
View/Open full text file from the Research portal (opens in new window)
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2025-11-01

Department

Department of Economics

Major/Subject

Mcode

Degree programme

Language

en

Pages

33

Series

Review of Economic Studies, Volume 92, issue 6, pp. 4084-4116

Abstract

Many auctions and procurement contests entail non-trivial bidding costs, which makes the bidders’ participation decisions endogenous to the auction design. We analyse the effect of different auction rules on potential bidders’ incentives to participate. We focus on first-price auctions with affiliated common values and a large pool of potential bidders. Our main interest is on auctions where the realized number of bidders is unknown at the bidding stage. In contrast to the standard case, both participation and bidding decisions are often non-monotonic in the symmetric equilibrium of our model. The expected revenue to the seller is often higher in the auction where the realized number of participating bidders is not disclosed.

Description

Keywords

Auctions

Other note

DOI

10.1093/restud/rdaf015

Citation

Murto, P & Välimäki, J 2025, 'Affiliated Common Value Auctions with Costly Entry', Review of Economic Studies, vol. 92, no. 6, pp. 4084-4116. https://doi.org/10.1093/restud/rdaf015

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202511268880

Collections

[article-cris] Kauppakorkeakoulu / BIZ