HOW RISK SHARING MAY ENHANCE EFFICIENCY OF ENGLISH AUCTIONS

• 成果类型: Article
• 署名作者: Hu, Audrey; Offerman, Theo; Zou, Liang
• 署名单位: Tsinghua University; University of Amsterdam; Tinbergen Institute; University of Amsterdam
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12439
• 发表日期: 2018
• 页码: 1235-1256
• 关键词: monotone comparative statics; averse buyers; INDEPENDENCE; preferences; INFORMATION; bidders; DESIGN

摘要

English auctions are known to be ex post efficient under various circumstances. However, they are inefficient ex ante for risk-averse seller and bidders. Our analysis of the English premium auction (EPA) reveals that, while maintaining ex post efficiency, awarding a premium to the highest two bidders makes the auction more attractive to all risk-averse bidders. This result is remarkably general, as it holds with possible interdependent bidder valuations and affiliated types. When bidders exhibit independent types, the EPA can also benefit a risk-averse seller and therefore strictly improve ex ante, or interim, Pareto efficiency of the English auction.