Bundling in auctions with non-linear valuations

Vladimir Smirnov, Andrew Wait*

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We examine when a revenue-maximising auctioneer prefers to auction a homogenous product in one bundle (a single-object auction) than to sell the item in two or more shares. When the items are super-additive the auctioneer always prefers a single-object auction. When the product valuations are sub-additive, the auctioneer is more likely to choose a share auction when there are a large number of potential bidders. When there are a small number of bidders the auctioneer will tend to prefer a single-object auction.

Original languageEnglish
Pages (from-to)17-26
Number of pages10
JournalAustralian Economic Papers
Volume50
Issue number1
DOIs
Publication statusPublished - Mar 2011

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