Skreta, V;
(2015)
Optimal auction design under non-commitment.
Journal of Economic Theory
, 159
(B)
pp. 854-890.
10.1016/j.jet.2015.04.007.
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Abstract
We characterize revenue-maximizing mechanisms in Myerson's (1981) environment when the seller behaves sequentially rationally, in the sense that she cannot commit not to propose a new mechanism if the previously chosen one fails to allocate the object. We show that the seller-optimal mechanism takes the same form as in the case when there is commitment: The seller maximizes revenue by assigning, at t = 1, the good to the buyer with the highest virtual valuation if it is above a buyer-specific reserve price. If no trade takes place at t = 1, at t = 2, the seller assigns the object to the buyer with the highest posterior virtual valuation, provided that it is above the seller's value.
| Type: | Article |
|---|---|
| Title: | Optimal auction design under non-commitment |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.jet.2015.04.007 |
| Publisher version: | https://doi.org/10.1016/j.jet.2015.04.007 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Mechanism design, Optimal auctions, Limited commitment |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10092296 |
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