Practically Implementable Auction for a Good with Countervailing Positive Externalities

Bhirombhakdi, Kornpob and Potipiti, Tanapong (2012): Practically Implementable Auction for a Good with Countervailing Positive Externalities.

Abstract

This study theoretically presents a new auction design called "take-or-give auction." The auction solves the free-rider problem in the case of two symmetric and risk-neutral bidders competing for a good with countervailing positive externalities. The auction makes efficient allocation. Moreover, the extension of the auction by addition some rules maximizes the seller's expected revenue.

• Item Type: MPRA Paper
• Language: English
• Keywords: Auction design, positive externalities, countervailing
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C79 - Other; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions

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