Auctions with cross-shareholdings
type: Item
instance of: scholarly article
title: Auctions with cross-shareholdings
zbMATH Open document ID: 1107.91040
author: Sudipto Dasgupta
author: Kevin Tsui
published in: Economic Theory
publication date: 2005-02-11T00:00:00Z
review text: The effect of cross-shareholding among two competing firms on their bidding behavior and the expected sales revenue for the seller in an auction environment is studied. The bidders' private signals are independent, and the model encompasses the private values model and a particular common value model as special cases. When cross-shareholding is symmetric, the bids decrease towards the collusive level as the degree of cross-shareholding increases. The Revenue Equivalence result no longer holds: the first-price auction generates higher expected revenue for the seller than the second-price auction. With asymmetric cross-shareholding, revenue comparisons are only possible in the common value setting. Expected revenue for the seller is again higher in the first-price than in the second price auction. Bidding behavior in the second-price auction is more sensitive to changes in cross-shareholding and the value environment than in the first-price auction.
reviewed by: Giacomo Bonanno
Mathematics Subject Classification ID: 91B26
zbMATH DE Number: 2133526
zbMATH Keywords: private-value auction
zbMATH Keywords: common-value auction
zbMATH Keywords: cross-shareholding
zbMATH Keywords: Revenue Equivalence
zbMATH Keywords: bidding
MaRDI profile type: Publication
full work available at URL: s00199-003-0407-y
OpenAlex ID: W2043665410
DOI: 10.1007/S00199-003-0407-Y
description: scientific article; zbMATH DE number 2133526