Three essays in the theory of auctions

This dissertation consists of three essays covering applications of auction design. The first essay analyzes a model where a number of objects is sold in sequential second-price auctions. Each bidder has a privately known discount factor by which his valuation for an object decreases in each auction. The main result shows that prices decline in the sequence of auctions, even if corrected for the decrease in valuations. This result can explain the declining price anomaly and the afternoon effect. The second essay deals with impatience on the buyer's side and analyzes a Dutch auction, where the buyers' valuations decline while the auction runs. It turns out that the optimal behavior for the seller is either to run a very slow or a very fast auction. In a slow auction bidders do not find it profitable to wait and the auction is equivalent to a take-it-or-leave-it offer. In the fast auction the time preferences become less important and the auction becomes a sealed-bid-first-price auction. When comparing the expected revenue of the Dutch auction with that of a Japanese auction (with impatient buyers), the Japanese auction turns out to be better for the seller. The third essay analyzes a procurement auction where a firm plans to buy one of two different items. An auction format is described where the auction not only determines the price but also which item to procure. The auction is designed with practical applications in mind, i.e. it focuses on additive handicaps for bids the on less valued item