Factors to Consider When Choosing Accounts Payable Services Providers.pptx
Optimalprice
1. Optimal Price Ceilings in a Common Value Auction
Archishman Chakraborty
Baruch College, City University of New York
Abstract
A simple common value auction is considered where it is optimal to set a ceiling price in
addition to a reserve price. The ceiling price prevents the better informed bidder from
outbidding the less informed bidders. This guarantees participation from the less informed
bidders raising the seller's revenues. The seller is better off by selling the good in an auction
with a price ceiling compared to selling the good at a fixed price.
Thanks are due to Faruk Gul.
Citation: Chakraborty, Archishman, (2002) "Optimal Price Ceilings in a Common Value Auction." Economics Bulletin, Vol. 3,
No. 7 pp. 1−7
Submitted: March 11, 2002. Accepted: April 18, 2002.
URL: http://www.economicsbulletin.com/2002/volume3/EB−02C70005A.pdf
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