Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • December 2021
  • Article
  • International Journal of Industrial Organization

Auctioneers Sometimes Prefer Entry Fees to Extra Bidders

By: Jiafeng Chen and Scott Duke Kominers
  • Format:Print
ShareBar

Abstract

We investigate a market thickness–market power tradeoff in an auction setting with endogenous entry. We find that charging admission fees can sometimes dominate the benefit of recruiting additional bidders, even though the fees themselves implicitly reduce competition at the auction stage. We also highlight that admission fees and reserve prices are different instruments in a setting with uncertainty over entry costs, and that optimal mechanisms in such settings may be more complex than simply setting a reserve price. Our results provide a counterpoint to the broad intuition of Bulow and Klemperer (1996) that market thickness often takes precedence over market power in auction design.

Keywords

Entry; Reserve Prices; Entry Fees; Auctions; Design

Citation

Chen, Jiafeng, and Scott Duke Kominers. "Auctioneers Sometimes Prefer Entry Fees to Extra Bidders." Art. 102737. International Journal of Industrial Organization 79 (December 2021).
  • Find it at Harvard

About The Author

Scott Duke Kominers

Entrepreneurial Management
→More Publications

More from the Authors

    • May 2023
    • Faculty Research

    Twitter Blues: Does Paid Verification Check Out?

    By: Scott Duke Kominers, Das Narayandas and Kerry Herman
    • April 2023
    • Faculty Research

    Bored Ape Yacht Club: Navigating the NFT World (A)

    By: Das Narayandas, Scott Duke Kominers and Kerry Herman
    • April 6, 2023
    • a16zcrypto.com

    A New NFT Launch Strategy: The Wave Mint

    By: Scott Duke Kominers and 1337 Skulls Sers
More from the Authors
  • Twitter Blues: Does Paid Verification Check Out? By: Scott Duke Kominers, Das Narayandas and Kerry Herman
  • Bored Ape Yacht Club: Navigating the NFT World (A) By: Das Narayandas, Scott Duke Kominers and Kerry Herman
  • A New NFT Launch Strategy: The Wave Mint By: Scott Duke Kominers and 1337 Skulls Sers
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College