Auctions II: Dependent Values

James Bergin

in Microeconomic Theory

Published in print May 2005 | ISBN: 9780199280292
Published online July 2005 | e-ISBN: 9780191602498 | DOI:
 Auctions II: Dependent Values

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Considers auctions with non-independent valuations. Equilibrium bidding behaviour in the first price, second price, and English auctions is characterized. Revenue comparisons are given, showing that the revenue equivalence theorem fails for the standard auctions when values are correlated. The linkage principle (price is positively ‘linked’ to information) is described. Finally, full surplus extraction is discussed at length.

Keywords: Affiliated values; first price auction; optimal auctions; second price auction; surplus extraction; the linkage principle; the winners curse

Chapter.  17577 words.  Illustrated.

Subjects: Microeconomics

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