Optimal mechanisms for an auction mediator

Alexander Matros; Andriy Zapechelnyuk

doi:10.1016/j.ijindorg.2010.08.004

Optimal mechanisms for an auction mediator

Alexander Matros, Andriy Zapechelnyuk^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	426-431
Number of pages	6
Journal	International Journal of Industrial Organization
Volume	29
Issue number	4
DOIs	https://doi.org/10.1016/j.ijindorg.2010.08.004
Publication status	Published - Jul 2011

Keywords

Mediator
Optimal mechanism
Vickrey auction

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10.1016/j.ijindorg.2010.08.004

Cite this

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title = "Optimal mechanisms for an auction mediator",

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.",

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AB - 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.

KW - Mediator

KW - Optimal mechanism

KW - Vickrey auction

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M3 - Article

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JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

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ER -

Optimal mechanisms for an auction mediator

Abstract

Keywords

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