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An Equilibrium Analysis of the Constrained Mean-Price Sealed Bid Auction

제한적 평균가낙찰제 경매방식의 균형분석

Seo, Yong-Mo;Rhee, Byungchae
서용모;이병채

  • Received : 2018.10.31
  • Accepted : 2019.01.20
  • Published : 2019.01.28

Abstract

In Korea, the first-price sealed bid auction and the constrained mean-price sealed bid auction(buchal-je in Korean) have been used alternatively as procurement auctions. In this paper, we characterize the constrained mean-price sealed bid auction in the context of mechanism design. We consider the general ?-bidder case in which each bidder has private information. Under the assumptions of uniformly distributed valuations and linear strategies, we derive the equilibrium of the constrained mean-price sealed bid auction. Furthermore, we analyze the efficiency and the expected revenue of this auction mechanism in comparison with the first-price sealed bid auction. Finally, we conclude with the critical remarks on the practical intention of the government which uses this auction.

Keywords

constrained mean-price sealed bid;first-price sealed bid auction;efficiency;revenue equivalence theorem