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Auction theory is a branch of applied economics that deals with how bidders act in auctions and researches how the features of auctions incentivise predictable outcomes. Auction theory is a tool used to inform the design of real-world auctions. Sellers use auction theory to raise higher revenues while allowing buyers to procure at a lower cost.
The linkage principle is a finding of auction theory. It states that auction houses have an incentive to pre-commit to revealing all available information about each lot, positive or negative. The linkage principle is seen in the art market with the tradition of auctioneers hiring art experts to examine each lot and pre-commit to provide a ...
Download as PDF; Printable version; In other projects Wikidata item; ... Auction theory is included in the JEL classification codes as JEL: D24. This is a topic category.
Revenue equivalence is a concept in auction theory that states that given certain conditions, any mechanism that results in the same outcomes (i.e. allocates items to the same bidders) also has the same expected revenue.
In auction theory, particularly Bayesian-optimal mechanism design, a virtual valuation of an agent is a function that measures the surplus that can be extracted from that agent. A typical application is a seller who wants to sell an item to a potential buyer and wants to decide on the optimal price.
An auction algorithm has been used in a business setting to determine the best prices on a set of products offered to multiple buyers. It is an iterative procedure, so the name "auction algorithm" is related to a sales auction, where multiple bids are compared to determine the best offer, with the final sales going to the highest bidders.
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Download as PDF; Printable version; ... Auction theory (2 C, 19 P) Pages in category "Auctions" The following 3 pages are in this category, out of 3 total. ...