We use perturbation analysis to obtain explicit approximations of the equilibrium bids in asymmetric first-price auctions with n bidders, in which bidders' valuations are independently drawn from different distribution functions. Several applications are presented: explicit approximations of the seller's expected revenue, the maximal bid, the optimal reserve price, inefficiency, and a consequence of stochastic dominance. We also suggest an improved numerical method for calculating the seller's expected revenue.
- Asymmetric auctions
- Perturbation analysis
ASJC Scopus subject areas
- Mathematics (all)
- Computer Science Applications
- Management Science and Operations Research