There is a widespread belief that in auctions with private values, the seller's revenue is increasing in the number of bidders. We show that there exists an auction setting with symmetric and affiliated private values in which the seller's expected revenue in a first price auction is decreasing in the number of bidders who participate in the auction.
Ed. by Cervellati, Matteo / Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Schipper, Burkhard
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Competition May Reduce the Revenue in a First Price Auction with Affiliated Private Values
Domenico Menicucci1
1Università degli Studi di Firenze, domenico.menicucci@dmd.unifi.it
Citation Information: The B.E. Journal of Theoretical Economics. Volume 9, Issue 1, Pages –, ISSN (Online) 1935-1704, DOI: 10.2202/1935-1704.1600, December 2009
Publication History:
- Published Online:
- 2009-12-04
Keywords: first price auctions; affiliated private values; the affiliation effect
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