Effect of commission on auctions
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    Abstract:

    In the symmetry independent private value and affiliated value model which induced commission , this pa2 per considers the bidding strategy in the first2price and second2price auctions. We find that the commission rate has effects on the bidders’biding strategy , on the expected profits of the seller and the auctioneer. The bigger the com2 mission rate is , the more passively the bidder bids , and the fewer expected profit the seller makes , but the more ex2 pected profit the auctioneer has. To our surprised , the bidder’s expected profit is not dependent on the commission rate. In the SIPV model , the revenue2equivalence theorem is also correct . These conclusions give some advices : the buyer need not worry about the high commission rate.

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