The effects of outside options on optimal auction outcomes

Date

2013-4-1

Author

Küçükşenel, Serkan

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In this paper, we study the seller-optimal auctions for auction design environments with pure informational externalities, and investigate the effects of outside options on auction outcomes. If the seller's outside option is endogenous and depends on the information structure of the market, we show that the seller sells the good more often as the auction design environment merges into the standard private-value auction setting. If the seller's outside option does not depend on the information structure of the market, we show that the relationship between the degree of informational externalities and sale decisions in seller-optimal auctions is ambiguous.

Subject Keywords

Auction design, Informational externalities, Outside options

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/532
https://hdl.handle.net/11511/58454

Collections

Department of Economics, Article