Competing auctions with non-identical objects (Q6100483)

In this paper the authors examine competing auctions when each bidder has uncorrelated values for the objects on sale. More precisely, each bidder has bidimensional private information, his values for the objects, and chooses the auction in which he participates after each seller has set a reserve price for her auction. The authors show that the equilibrium reserve price in the second setting may be higher than in the first setting. For the game of reserve price setting played by the sellers, it is shown that in each symmetric equilibrium the reserve price level is determined by the interplay of two effects, a virtual value effect and a business stealing effect. The basic model is introduced in Section 3. The bidders' game and sellers' game are precisely examined in Sections 4--5. The proofs of the basic propositions the reader may find in Section 6.