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| Tekijä: | Kwiek, M. |
| Otsikko: | Reputation and cooperation in the repeated second-price auctions |
| Lehti: | Journal of the European Economic Association
2011 : OCT, VOL 9:5, p.982-1001 |
| Asiasana: | auctions bidding prices co-operation reputation Europe |
| Vapaa asiasana: | prediction models |
| Kieli: | eng |
| Tiivistelmä: | This paper shows that strong reputational effects exist in a general class of second price auctions. If reputation is one-sided and bidders are patient, then often the bidder without reputation does not challenge the other bidder. Hence, the bidder with reputation obtains most of the surplus, while the other bidder and the seller get very little. If reputation is two-sided, then the bidders undertake a game akin to War of Attrition. The resulting payoff is very low for the bidders and very high for the seller. Either way, the Folk Theorem fails: collusion in the second price auctions is impossible. The predictions of the model are that prices in early auctions should reach levels above the value of the object, then declining towards the reserve price; a set of strong bidders emerges. A recent series of auctions of spectrum for UMTS services in Europe seems to be in agreement with the predictions of the model. |
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