Auctioneer's Behavior at a Single Object English Auction with Heterogeneous Non-Cooperative Bidders
Oct 31 1987
If bidders draw their private valuations independently from heterogeneous distributions at an English auction and the auctioneer can observe the highest bid before taking any action then, contrary to the results for homogeneity, the revenue maximizing reserve price of the auctioneer will not, in general, be a constant. Instead, it will be a function of the highest observed bit. Conditions are provided to determine how the English auctioneer's reserve price varies withe the highest observed bid.