The logic of revenue comparisons for different types of common-value auctions is substantially altered if the number of participants, rather than being fixed, responds endogenously to the expected profitability from participating. In a thoroughly symmetric model, a seller may prefer that competition be indirect: an auction procedure in which fewer participants are needed to drive the expected profitability from participating down to the level obtainable in other auctions in the economy can attain higher expected revenue if a sale is sufficiently likely. This insight allows a complete revenue ranking of standard auction procedures, with endogenous entry.

The logic of revenue comparisons for different types of common-value auctions is substantially altered if the number of participants, rather than being fixed, responds endogenously to the expected profitability from participating. In a thoroughly symmetric model, a seller may prefer that competition be indirect: an auction procedure in which fewer participants are needed to drive the expected profitability from participating down to the level obtainable in other auctions in the economy can attain higher expected revenue if a sale is sufficiently likely. This insight allows a complete revenue ranking of standard auction procedures, with endogenous entry.

Research in experimental economics has cogently challenged the fundamental precept of neoclassical economics that economic agents optimize. The last two decades have seen elaboration of boundedly rational models that try to move away from the optimization approach, in ways consistent with experimental findings. Nonetheless, the collection of alternative models has made little headway supplanting the dominant paradigm. We delineate key ways in which neoclassical microeconomics holds continuing and compelling advantages over bounded-rationality models, and suggest, via a few examples, the sorts of further, difficult pushes that would be needed to redress this state of affairs. Closer collaboration between theoretic modeling and experiments is clearly seen to be necessary.

Dominant strategies seldom exist in non-cooperative games. Moulin's concept of a dominance solvable game generalizes, dominant strategy without dramatic loss in appeal. We consider a class of common-value auctions characterized by the property that the maximum of a collection of informative signals is a sufficient statistic for the entire collection. We demonstrate that this class of second-price auctions is dominance solvable.

John H. Kagel, Ronald M. Harstad, Dan Levin, Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study, Econometrica, Vol. 55, No. 6 (Nov., 1987), pp. 1275-1304