Optimal search auctions with correlated bidder types

Jacques Crémer; Yossi Spiegel; Charles Z. Zheng

doi:10.1016/j.econlet.2006.03.047

Optimal search auctions with correlated bidder types

Jacques Crémer, Yossi Spiegel^*, Charles Z. Zheng

^*Corresponding author for this work

Coller School of Management

Research output: Contribution to journal › Article › peer-review

Abstract

We study optimal auctions when contacting prospective bidders is costly and the bidders' values are correlated. Although full surplus extraction is, in general, impossible, we can construct a search mechanism that fully extracts the surplus with an arbitrarily high probability.

Original language	English
Pages (from-to)	94-100
Number of pages	7
Journal	Economics Letters
Volume	93
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2006.03.047
State	Published - Oct 2006

Keywords

Correlated values
Full surplus extraction
Optimal auction
Search costs
Search mechanism

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10.1016/j.econlet.2006.03.047

Cite this

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title = "Optimal search auctions with correlated bidder types",

abstract = "We study optimal auctions when contacting prospective bidders is costly and the bidders' values are correlated. Although full surplus extraction is, in general, impossible, we can construct a search mechanism that fully extracts the surplus with an arbitrarily high probability.",

keywords = "Correlated values, Full surplus extraction, Optimal auction, Search costs, Search mechanism",

author = "Jacques Cr{\'e}mer and Yossi Spiegel and Zheng, {Charles Z.}",

note = "Funding Information: Charles Zheng thanks the NSF for grant SES-0214471. ",

year = "2006",

month = oct,

doi = "10.1016/j.econlet.2006.03.047",

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AU - Spiegel, Yossi

AU - Zheng, Charles Z.

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N2 - We study optimal auctions when contacting prospective bidders is costly and the bidders' values are correlated. Although full surplus extraction is, in general, impossible, we can construct a search mechanism that fully extracts the surplus with an arbitrarily high probability.

AB - We study optimal auctions when contacting prospective bidders is costly and the bidders' values are correlated. Although full surplus extraction is, in general, impossible, we can construct a search mechanism that fully extracts the surplus with an arbitrarily high probability.

KW - Correlated values

KW - Full surplus extraction

KW - Optimal auction

KW - Search costs

KW - Search mechanism

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JO - Economics Letters

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Optimal search auctions with correlated bidder types

Abstract

Keywords

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