We compare auctions with bidder qualification before or after the bidding process. We show that although post-auction qualification is more efficient, the auctioneer prefers pre-auction qualification when bidders’ qualification costs are high.
Gillen, Philippe, Vitali Gretschko and Alexander Rasch (2016), Pre-auction or post-auction qualification?, Economic Theory Bulletin. Download
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Keywords
Bidding cost; Qualification; Second-price sealed-bid auction