When and why not to auction

Research output: Contribution to journalArticlepeer-review

23 Scopus citations


Standard auctions are known to be a revenue-maximizing way to sell an object under broad conditions when buyers are symmetric and have independent private valuations. We show that when buyers have interdependent valuations, auctions may lose their advantage, even if symmetry and independence of information are maintained. In particular, simple alternative selling mechanisms that sometimes allow a buyer who does not have the highest valuation to win the object will in general increase all buyers' willingness to pay, possibly enough to offset the loss to the seller of not always selling to the buyer with the greatest willingness to pay.

Original languageEnglish (US)
Pages (from-to)583-596
Number of pages14
JournalEconomic Theory
Issue number3
StatePublished - Apr 2006

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


  • Adverse selection
  • Auctions
  • Interdependencies
  • Posted prices


Dive into the research topics of 'When and why not to auction'. Together they form a unique fingerprint.

Cite this