A lower bound on seller revenue in single buyer monopoly auctions

DOI10.1016/J.ORL.2013.05.011MaRDI QIDQ2450692zbMATH OpenOpenAlexWikidataFDO

Authors Omer Tamuz

Publication date 15 May 2014

Published in Operations Research Letters (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1204.5551, https://resolver.caltech.edu/CaltechAUTHORS:20161114-065718415

zbMATH Keywords

auctionsgeometric expectationmonopoly

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26) Special types of economic markets (including Cournot, Bertrand) (91B54)

Abstract: We consider a monopoly seller who optimally auctions a single object to a single potential buyer, with a known distribution of valuations. We show that a tight lower bound on the seller's expected revenue is $1/e$ times the geometric expectation of the buyer's valuation, and that this bound is uniquely achieved for the equal revenue distribution. We show also that when the valuation's expectation and geometric expectation are close, then the seller's expected revenue is close to the expected valuation.

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Cites work

• Fundamental Probability
• On the Lambert \(w\) function
• Optimal Auction Design
• Simple, optimal and efficient auctions

Cited in

(4)

• On revenue monotonicity in combinatorial auctions
• On Condorelli inequality for log-concave demand
• How service quality variability hurts revenue when customers learn: implications for dynamic personalized pricing
• Robust lower bounds on monopoly profit with -concave demand

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