Auction theory
From Wikipedia, the free encyclopedia
Auction theory is a branch of game theory which deals in how people react in a specific circumstance of an auction.
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[edit] Types of auction
There are traditionally four types of auction that are used for the allocation of a single item:
- First-price sealed-bid auctions
- Second-price sealed-bid auctions, AKA Vickrey auctions
- Ascending-bid auctions, AKA English auctions
- Descending-bid auctions, AKA Dutch auction
Most auction theory revolves around these four types. However, other auction types have also received some academic study, such as:
- Lowest unique price auctions
- Many homogenous item auctions
- Simultaneous multiple-round auctions
[edit] Theoretical results
One of the major findings of Auction Theory is the Revenue Equivalence Theorem which states that under certain (reasonable) assumptions these auctions forms will lead to the same revenue for the seller.
[edit] References
[edit] Further reading
- Klemperer, Paul (2004). Auctions: Theory and Practice. ISBN 0-691-11925-2. Draft edition available online
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