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Durham Research Online
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Participation and welfare in auctions with default.

Lee, J. and Li, D.Z. (2019) 'Participation and welfare in auctions with default.', Economics letters., 183 . p. 108620.


In an auction with costly participation, we show that bidder default may cause social welfare loss through (i) the possibility of no trade and (ii) the under participation of bidders in equilibrium. We also provide closed-form solutions to the model.

Item Type:Article
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Publisher statement:© 2019 This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Date accepted:12 August 2019
Date deposited:19 August 2019
Date of first online publication:14 August 2019
Date first made open access:14 February 2021

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