Inefficient rushes in auctions

• 成果类型: Article
• 署名作者: Hernando-Veciana, Angel; Michelucci, Fabio
• 署名单位: Universidad Carlos III de Madrid; Charles University Prague; Czech Academy of Sciences; Economics Institute of the Czech Academy of Sciences
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1555-7561
• DOI: 10.3982/TE2513
• 发表日期: 2018-01-01
• 页码: 273-306
• 关键词: Privatization; EFFICIENCY; auctions; mechanism design; multi-round mechanisms

摘要

We analyze a setting common in privatizations, public tenders, and takeovers in which the ex post efficient allocation, i.e., the first best, is not implementable. Our first main result is that the open ascending auction is not second best because it is prone to rushes, i.e., all active bidders quitting simultaneously, that undermine its efficiency. Our second main result is that the second best can be implemented with a two-round auction used in real-life privatizations. We also show how this result generalizes using a survival auction with a novel tie-breaking rule.