Template-Type: ReDIF-Paper 1.0
Title: A Theory of Auctions With Endogenous Valuations
Author-Name: Benny Moldovanu
Author-Email: mold@uni-bonn.de
Author-Name: Alex Gershkov
Author-Email: alexg@huji.ac.il
Author-Name: Philipp Strack
Author-Email: pstrack@berkeley.edu
Classification-JEL: D44, D47
Keywords: revenue maximization, endogenous values , investments,  majorization

Abstract: We study the revenue maximizing allocation of m units among n symmetric agents that have unit demand and convex preferences over
 the probability of receiving an object. Such preferences are naturally induced by a game where the agents take costly actions that affect
 their values before participating in the mechanism. Both the uniform m + 1 price auction and the discriminatory pay-your-bid auction with
 reserve prices constitute symmetric revenue maximizing mechanisms. Contrasting the case with linear preferences, the optimal reserve price
 reacts to both demand and supply, i.e., it depends both on the number of objects m and on number of agents n. The main tool in our analysis
 is an integral inequality involving majorization, super-modularity and convexity due to Fan and Lorentz (1954).
Note: 
Length: 50
Creation-Date: 2018-07
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp031
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2018_031