Auctions with Numerous Bidders
March 2005
Research Paper
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We study auctions in which the number of potential bidders is large, such as in Internet auctions. With numerous bidders, the expected revenue and the optimal bid function in a first price auction result in complicated expressions, except for a few simple distribution function for the bidders' valuations. We show that these expressions can be well approximated using extreme value theory without assuming a particular distribution function. The theory is applied to data from Internet auctions.
Keywords
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Automatically Extracted Terms
- auction
- distribution
- valuation
- bidder
- value
- revenue
- number
- function
- theory
- estimators
- endpoint
- price
- limit
- estimate
- order
- quantile
- weibull
- statistic
- order statistics
- internet
