Viernes Económico | Different number of bidders in sequential auctions
In this paper the authors Xin Meng and Hikmet Gunay analyze the correct selling order in a second-price sequential auction for two heterogeneous synergistic goods with local and global bidders. They prove that as the number of local bidders in the second auction approaches infinity, the outcome is always efficient. However, as the number of local bidders in the first auction approaches infinity, the outcome is inefficient with a positive probability. By using simulations, they show that selling the good with more finite bidders in the second auction results in a more efficient outcome. If the selling order is incorrect, the probability of an inefficient outcome is around 19%.