Theorem of Revenue Equivalence

The Revenue Equivalence Theorem states that, under certain conditions, different auction formats will generate the same expected revenue for the seller, assuming bidders are risk-neutral and have similar valuation behaviors. Essentially, if all bidders are rational and value the item similarly, any auction method—such as English (ascending bid), Dutch (descending bid), or sealed-bid auctions—should, on average, produce the same revenue for the seller. This theorem highlights the idea that the key to revenue isn't the auction type itself, but the underlying conditions and bidder behaviors.