Auctions with Endogenous Valuations: The Snowball Effect Revisited

Posted: 5 Sep 1998

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Abstract

This paper looks at the determination of ownership of capacity when there are two ex-ante symmetric agents bidding for many units of capacity which are sold sequentially. It is shown that convexity of payoffs in the final stage of the game is sufficient to ensure monopolization of capacity, but that increasing returns to scale are not sufficient to ensure monopolization.

JEL Classification: C72, D43, D44, D45

Suggested Citation

Krishna, Kala, Auctions with Endogenous Valuations: The Snowball Effect Revisited. Available at SSRN: https://ssrn.com/abstract=123528

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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