Simultaneous pooled auctions

Suppose a seller wants to sell k similar or identical objects and there are n > k potential buyers. Suppose that each buyer wants only one object. In this case, we suggest the use of a simultaneous auction that would work as follows. Players are asked to submit sealed bids for one object. The indivi dual with the highest bid chooses an object first; the individual with the second-highest bid chooses the next object; and this process continues unti l the individual with the kth highest bid receives the last object. Each in dividual pays the equivalent to his or her bid. When objects are identical, we show that the proposed auction generates the same revenue as a first-pr ice sealed-bid sequential auction. When objects are perfectly correlated, t here is no known solution for sequential auctions, whereas we can character ize bidding strategies in the proposed auction. Moreover, the proposed auct ion is optimal (given an appropriately chosen reserve price), and it may be easier and cheaper to run than a sequential auction.