Title: Auctions with prestige motives
Authors: Bos, Olivier
Truyts, Tom
Issue Date: Jul-2014
Publisher: KU Leuven CES
Series Title: CES - Discussion paper series, DPS14.19 pages:1-43
Abstract: Social status, or prestige, is an important motive for buying art or collectibles and for participation in charity auctions. We study a symmetric private value auction with prestige motives, in which the auction outcome is used by an outside observer to infer the bidders’ types. We elicit conditions under which an essentially unique D1 equilibrium bidding function exists in four auction formats: first-price, second-price, all-pay and the English auction. We obtain a strict ranking in terms of expected revenues: the first-price and all-pay auctions are dominating the English auction but are dominated by the second-price auction. Expected revenue equivalence is restored asymptotically for the number of bidders going to infinity.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven

Files in This Item:
File Description Status SizeFormat
DPS1419.pdf Published 632KbAdobe PDFView/Open


All items in Lirias are protected by copyright, with all rights reserved.