2023 Reports

Coasian Equilibria in Sequential Auctions

Liu, Qingmin; Mierendorff, Konrad; Shi, Xianwen

We study stationary equilibria in a sequential auction setting. A seller runs a sequence of standard first-price or second-price auctions to sell an indivisible object to potential buyers. The seller can commit to the rule of the auction and the reserve price of the current period but not to reserve prices of future periods. We prove the existence of stationary equilibria and establish a uniform Coase conjecture—at any point in time and in any stationary equilibrium, the seller’s profit from running sequential auctions converges to the profit of running an efficient auction as the period length goes to zero.

Keywords: Coase conjecture, auctions with limited commitment, sequential auctions