Abstract
We study first-price auctions in which the number of bidders is the seller’s private information, and investigate the use of a reserve price to signal this private information. We use the D1 criterion to refine the set of equilibria and characterize a symmetric separating equilibrium outcome, where the reserve price increases with the number of bidders. The key driving force is a certain form of single-crossing property. With more bidders, the seller can afford a high reserve price that discourages competition in the auction, for the winning bid is more likely to be higher.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
