Optimal mechanisms for an auction mediator

Alexander Matros, Andriy Zapechelnyuk*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    2 Citations (Scopus)

    Abstract

    We consider a dynamic auction environment with a long-lived seller and short-lived buyers mediated by a third party. A mediator has incomplete information about traders' values and selects an auction mechanism to maximize her expected revenue. We characterize mediator-optimal mechanisms and show that an optimal mechanism has a simple implementation as a Vickrey auction with a reserve price where the seller pays to the mediator only a fixed percentage from the closing price.

    Original languageEnglish
    Pages (from-to)426-431
    Number of pages6
    JournalInternational Journal of Industrial Organization
    Volume29
    Issue number4
    DOIs
    Publication statusPublished - Jul 2011

    Keywords

    • Mediator
    • Optimal mechanism
    • Vickrey auction

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