Sequential Bidding in Asymmetric First Price Auctions

摘要

We study asymmetric first price auctions in which bidders place their bids sequentially, one after the other andrnonly once. We show that, when bidders’ values are drawn from uniform distributions and are asymmetric, i.e.,rnthere is a strong bidder and a weak bidder (the strong bidder’s distribution first order stochastically dominatesrnthat of the weak bidder’s), the expected revenue in the sequential bidding first price auction (when the strongrnbidder bids first) may be higher than in the simultaneous bidding first price auction as well as the simultaneousrnbidding second price auction. The expected payoff of the weak bidder is also higher in the sequential first pricernauction. Therefore a seller interested in increasing revenue facing asymmetric bidders may find it beneficial tornorder them and let them bid sequentially instead of simultaneously.