RESEARCH

Asymmetric Auctions with Discretely Distributed Valuations - (with Nicola Doni and Domenico Menicucci) - The BE Journal of Theoretical Economics, 25(1): 99-118. (2025).

We examine a two-bidder auction setting in which the distributions for the bidders’ valuations are asymmetric over a support consisting of three elements. For the first price auction, for each parameter values we derive the unique Bayes Nash Equilibrium in closed form. We rely on this result to compare the revenue in the first price auction with the revenue in the second price auction. The latter is often revenue superior to the former, and we determine precisely, given a distribution for the value of a bidder, when a distribution for the value of the other bidder exists such that the first price auction is superior to the second price auction. 

Collusion with Not-So-Secret Rings  - Journal of Quantitative Economics, 22(2): 563 - 570. (2024).

When collusion is analyzed for Independent private value auctions, it is implicitly assumed that ring presence is commonly known to colluding and non-colluding bidders. We drop this assumption and analyze a simple model of a first price Independent Private Value auction with uniformly distributed values where a single bidder knows privately of the existence of collusion by others. We show that this knowledge leads him to bid shading (weakly) in the first price auction compared to what he would have bid otherwise. This in turn yields the result that the second price auction dominates the first price auction in terms of seller revenue. This contrasts results from the literature showing that under our framework, when bidding is done while the presence of colluding bidders is common knowledge, the first price auction dominates the second price auction. 

Earlier versions appeared under the title - Suspecting Collusion.

Secret versus Public Rings in Common Value Auctions - International Journal of Economic Theory (2025).

For a second-price common value auction with an “almost all-inclusive ring”, we analyze whether the auctioneer should reveal the ring’s presence, and if so, whether this revelation should be public or private to the nonring bidder. We show for a family of value functions that public revelation induces the nonring bidder to bid higher than in a non-cooperative scenario. This implies that the auctioneer may improve his position this way. On the other hand, it highlights a new tactic that an auctioneer may use to manipulate bidder behavior by creating the false impression of collusion to induce higher bids.

Investments in First-Price and Second-Price Procurement Auctions - (with Domenico Menicucci and Nicola Doni) - [Job Market Paper]

This paper is about a procurement auction setting with two sellers in which before the auction seller  can make an investment which improves the ex ante probability distribution of his cost; seller  observes seller ’s investment decision before bidding occurs. Under somewhat restrictive assumptions on the pre- and the post-investment cost distributions, Arozamena and Cantillon (2004) prove that in the first price auction seller ’s investment induces seller  to bid more aggressively. This negative strategic effect contributes to AC’s result that the investment incentive for seller  is stronger in the second price auction than in the first price auction. 

We prove that under weaker but economically significant assumptions, and discretely distributed costs, an investment by seller  may actually induce seller  to bid less aggressively in the first price auction (i.e., the strategic effect may be positive), and the investment incentive may be stronger in the latter auction. Moreover, in some cases the buyer prefers the first price auction precisely because it provides a stronger investment incentive, even though the second price auction is preferable when no investment is possible. We prove that the two auctions are not equivalent in a setting in which each seller has the option to invest and the sellers are ex ante symmetric, and that the second price auction gives a stronger investment incentive to the initially stronger seller than to the other seller (this increases asymmetries), but such result does not necessarily hold in the first price auction. 

Congestion and the Market Structure of Fleets - (with Federico Boffa and Alberto Iozzi)