Special bidders dominate auctions, reducing seller revenue and impacting profits.
The article explores how auctions change when one bidder has a special advantage. It finds that when this special bidder becomes more dominant, the seller's revenue decreases. The study also shows that the special bidder's value distribution can be transformed into a simpler form without affecting the auction's outcome. Additionally, the findings from second price auctions can be applied to first-price auctions as well.