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Title Efficiency and Revenue in Asymmetric Auctions
Author Kyungmin Kim (Emory University) and Youngwoo Koh (Hanyang University)
Volume 35 Number 2
Pages 371-391 
Keywords Asymmetric Auctions, Revenue Equivalence, Ex Ante Bidder Asymmetry
Abstract We study the efficiency and revenue properties of first- and second-price auctions in an
environment where bidders values are drawn from different binary distributions. We
identify a necessary and sufficient condition for a first-price auction to induce an efficient
allocation. The condition reveals the source of allocative inefficiencies in asymmetric firstprice
auctions. We further show that the sellers revenue is higher in a second-price auction
than it is in a first-price auction whenever allocations in the two auction formats are
efficient. We highlight how the difference in different bidder types beliefs induces the
File KER-20190701-35-2-04.pdf
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