Auction timing and market thickness

• 成果类型: Article
• 署名作者: Chaves, Isaias N.; Ichihashi, Shota
• 署名单位: Northwestern University; Queens University - Canada
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.11.006
• 发表日期: 2024
• 页码: 161-178
• 关键词: Auctions; market design; optimal stopping; monopoly; order statistics

摘要

A seller faces a pool of potential bidders that changes over time. She can delay the auction to have a thicker market later on. The seller imposes static distortions (through her choice of reserve prices) and dynamic distortions (through her choice of market thickness). Under a condition on types that generalizes increasing hazard rates, we show that (i) regulating only static distortions can harm efficiency; (ii) when regulating only dynamic distortions, a social planner should reduce market thickness; (iii) if a planner can affect both types of distortions, she should still choose a lower market thickness than the seller, i.e., market thickness is inefficiently high; (iv) the extent of timing disagreement between the seller and a social planner is higher when they both have to use an efficient auction than when they both have to use an optimal one.