Information revelation and random entry in sequential ascending auctions

We examine a model in which multiple buyers with single-unit demand are faced with an infinite sequence of auctions. New buyers arrive on the market probabilistically, and are each endowed with a constant private value. Moreover, objects also arrive on the market at random times, so the number of competitors and the degree of informational asymmetry among them may vary across from one auction to the next. We demonstrate by way of a simple example the inefficiency of the second-price sealed-bid auction in this setting, and therefore assume that each object is sold via ascending auction. We then characterize an efficient and fully revealing equilibrium for the game in which the objects are sold via ascending auctions. We show that each buyer's bids and payoffs depend only upon their rank amongst their competitors and the (revealed) values of those with lower values. Furthermore, strategies are memoryless--bids depend only upon the information revealed in the current auction, and not...

• Type: Journal
• Year: 2008
• Where: SIGECOM
• Authors: Maher Said
• Keywords: Auction, Constant Private Value, ECommerce, Second-price Sealed-bid Auction, SIGECOM 2008