Decision Sciences
4 years ago

Stochastic value changes in auctions can decrease bidder payoffs significantly.

RePEc: Research Papers in Economics
Auctions with Almost Homogeneous Bidders
Bernard Lebrun

Paper Summary

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The article explores auctions where bidders have slightly different values, rather than being exactly the same. By studying how auction revenues change with these variations, the researchers found that different auction types can lead to similar outcomes under certain conditions. They also discovered that in some cases, adding members from other groups to a cartel can be profitable only if the new members bring strong benefits.