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Simultaneous Auctions with Synergies

Author

Listed:
  • Vijay Krishna
  • Robert Rosenthal
Abstract
Motivated by recent auctions of licenses for the radio frequency spec trum, we consider situations where multiple objects are auctioned simultaneousl y by means of a second-price, sealed-bid auction. For some buyers, called globa l bidders, the value of multiple objects exceeds the sum of the objects' values separately. Others, called local bidders, are interested in only one object. I n a simple independent private values setting, we (a) characterize an equilibri um that is symmetric among the global bidders; (b) show that the addition of bi dders often leads to less aggressive bidding; and (c) compare the revenues obta ined from the simultaneous auction to those from its sequential counterpart.

Suggested Citation

  • Vijay Krishna & Robert Rosenthal, 1995. "Simultaneous Auctions with Synergies," Game Theory and Information 9503004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:9503004
    Note: 32 pages, Figures are not included and may be obtained by FAX by send ing an e-mail message to either author.
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    References listed on IDEAS

    as
    1. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 413-438.
    2. Gale, Ian L. & Stegeman, Mark, 2001. "Sequential Auctions of Endogenously Valued Objects," Games and Economic Behavior, Elsevier, vol. 36(1), pages 74-103, July.
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    4. Gale, Ian, 1990. "A multiple-object auction with superadditive values," Economics Letters, Elsevier, vol. 34(4), pages 323-328, December.
    5. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    6. Krishna, Kala, 1993. "Auctions with Endogenous Valuations: The Persistence of Monopoly Revisited," American Economic Review, American Economic Association, vol. 83(1), pages 147-160, March.
    7. Kevin Lang & Robert W. Rosenthal, 1991. "The Contractors' Game," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 329-338, Autumn.
    8. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
    9. Krishna, Vijay & Morgan, John, 1997. "An Analysis of the War of Attrition and the All-Pay Auction," Journal of Economic Theory, Elsevier, vol. 72(2), pages 343-362, February.
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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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