TY  - JOUR
AU  - Bulow,Jeremy I.
AU  - Klemperer,Paul D.
TI  - When are Auctions Best?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13268
PY  - 2007
Y2  - July 2007
UR  - http://www.nber.org/papers/w13268
L1  - http://www.nber.org/papers/w13268.pdf
N1  - Author contact info:
Jeremy I. Bulow
Stanford University
Graduate School of Business
Stanford, CA  94305-7298
Tel: 650/723-2160
Fax: 650/725-8916
E-Mail: jbulow@stanford.edu

Paul D. Klemperer
Nuffield College
Oxford University
Oxford OX1 1NF
England
E-Mail: paul.klemperer@economics.ox.ac.uk
AB  - We compare the two most common bidding processes for selling a company or other asset when participation is costly to buyers. In an auction all entry decisions are made prior to any bidding. In a sequential bidding process earlier entrants can make bids before later entrants choose whether to compete. The sequential process is more efficient because entrants base their decisions on superior information. But pre-emptive bids transfer surplus from the seller to buyers. Because the auction is more conducive to entry in several ways it usually generates higher expected revenue.
ER  -