Regulating Bidder Participation in Auctions
Vivek Bhattacharya, James Roberts, and Andrew Sweeting
,
4
(
45
)
The RAND Journal of Economics
675-704
October
2014
SWEETING_ERA_Mar2014.pdf461.9 KB
Abstract
Regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry. We show that the relative performance of two such mechanisms, a standard first-price auction with free entry and an entry rights auction, depends nonmonotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism.