Buyers’ welfare maximizing auction design: comment

Abstract

In an earlier paper published in this journal, Bauer (2023) claims to have constructed an auction format that maximizes buyers’ welfare. We note that the characterization of such a mechanism in Proposition 1 of Bauer (2023) is incomplete because it does not precisely specify the payment rule. Because of that, the discussion following this proposition is misleading and the mechanism proposed in the example is not incentive compatible. The complete characterization of the optimal mechanism is the one from Krishna and Perry (1998).