Decision Sciences
4 years ago

Auction Loopholes Exploit Buyers, Maximize Profits for Sellers

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Games and Economic Behavior
Pre-auction offers in asymmetric first-price and second-price auctions
René Kirkegaard, Per Baltzer Overgaard

Paper Summary

The article explores how offering deals before auctions can be profitable in certain situations. In a second-price auction, a single offer is not beneficial, but multiple offers can be. In a first-price auction, a single offer can be profitable. The researchers found that making pre-auction offers can help get better results by aligning bidder valuations with the best outcome.

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