We study asymmetric second-price auctions under incomplete information. The bidders have two potentially different, commonly known, valuations for the object and private information about their entry costs. The seller, however, does not benefit from these entry costs. We calculate the equilibrium strategies of the bidders and analyze the optimal design for the seller in this environment in terms of expected entry and the number of potential bidders.
Bibliographical notePublisher Copyright:
© 2022 by the authors.
- asymmetric auctions
- entry costs
ASJC Scopus subject areas
- Statistics and Probability
- Statistics, Probability and Uncertainty
- Applied Mathematics