Revenue Equivalence for Onesided MarketsA question commonly addressed in the economic analysis of auctions is whether any two auction mechanisms are "revenue equivalent". Two auctions are said to be "revenue equivalent" if they result in the same expected sales price. A more formal description of revenue equivalencePaul Klemperer gives the following more formal statement (and a complete treatment in Appendix A) in his paper "Auction Theory: A Guide to the Literature". (Journal of Economic Surveys v13, n3 (July 1999): 22786): yields the same expected revenue (and results in each bidder making the same expected payment as a function of her signal). research focus on the issue of revenue equivalenceTests of the revenue equivalence theorem involve two separate issues. The more basic issue concerns the strategic equivalence (or isomorphism) of (a) the firstprice and Dutch auctions and (b) the secondprice and English auctions. Strategic equivalence of the auctions in the pair(s)have the same revenue irrespective of bidders' risk attitudes.Assuming that strategic equivalence is satisfied for both auction pairs, a second issue concerns the possible revenue equivalence between auction pairs (a) and (b) For a discussion of experimental research on revenue equivalenceclick here.
 
