A Note on Sequential Auctions
This note provides an explanation for the 'declining-price anomaly' in sequential second price auctions. We illustrate how the average winning bids of risk neutral agents bidding for objects with valuations drawn from independent, identical distributions are lower in later auctions than in earlier auctions. When the objects are not identical we determine the optimal order in which they should be auctioned.
We are grateful to Anne Sholtz, Ruqu Wang and an anonymous referee for helpful comments. Both authors acknowledge financial support from SSHRC. We are responsible for any errors that remain. Published as Bernhardt, Dan, and David Scoones. "A note on sequential auctions." The American economic review 84, no. 3 (1994): 653-657.
Submitted - sswp829.pdf