Post-auction investment by financially constrained bidders

• 成果类型: Article
• 署名作者: Sano, Ryuji
• 署名单位: Yokohama National University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105742
• 发表日期: 2023
• 关键词: auction; Financial constraint; INVESTMENT; Scoring auction

摘要

This study examines auctions in which the value of goods is endogenously determined by ex post in-vestment while bidders face financial constraints. The main results are twofold. First, we characterize performance comparisons on revenue and investment between standard auctions. When the valuation is linear in investment, we have the equivalence theorem with respect to the seller's expected revenue and the winner's expected investment. When the valuation is concave in investment, the first-price auction yields higher expected revenue than the second-price auction. In addition, under additional conditions, the ex-pected investment is larger in the second-price auction. Second, we analyze mechanisms other than simple auctions when sellers aim to promote investment. Scoring auctions increase the winner's investment at the expense of a decrease in revenue compared to price-only auctions.(c) 2023 Elsevier Inc. All rights reserved.