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It is widely believed that the English auction is solved after the dominated strategies are eliminated. This paper demonstrates that the dominance criterion is not very effective in many English auction models. To bid more than the true willingness to pay is dominated but a stronger solution...
Persistent link: https://www.econbiz.de/10005755783
We study a class of common-value second-price auctions with differential information. This class of common-value auctions is characterized by the property that each player's information set is connected with respect to the common value. We showthat the entire class is dominance solvable, and...
Persistent link: https://www.econbiz.de/10005043129
We consider second-price common-value auctions with an increasing number of bidders. We define a strategy of bidder i to be (ex-post, weakly) asymptotically dominated if there is another strategy for i that does, in the limit, as well against any sequence of strategies of iʼs opponents, and...
Persistent link: https://www.econbiz.de/10011049680
We consider second-price and first-price auctions in the symmetric independent private values framework. We modify the standard model by the assumption that the bidders have reference-based utility, where a publicly announced reserve price has some influence on the reference point. It turns out...
Persistent link: https://www.econbiz.de/10010263146
The importance of auction theory has gained increased recognition in the scientific community, the latest recognition being the award of the Nobel price to Vickrey and Mirrlees. Auction theory has been used in quite different fields, both theoretically and empirically. This paper connects recent...
Persistent link: https://www.econbiz.de/10010291059
We study auction design when parties cannot commit themselves to the mechanism. The seller may change the rules of the game and the buyers choose their outside option at all stages. We assume that the seller has a leading role in equilibrium selection at any stage of the game. Stationary...
Persistent link: https://www.econbiz.de/10011325053
This paper studies the evolutionary stability of the unique Nash equilibrium of a first price sealed bid auction. It is shown that the Nash equilibrium is not asymptotically stable under payoff monotonic dynamics for arbitrary initial popu- lations. In contrast, when the initial population...
Persistent link: https://www.econbiz.de/10010272558
We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular,...
Persistent link: https://www.econbiz.de/10003782307
Recent literature has shown that all-pay auctions raise more money for charity than winner-pay auctions. We demonstrate that the first and second-price winner-pay auctions generate higher revenue than first-price all-pay auctions when bidders are sufficiently asymmetric. To prove it, we consider...
Persistent link: https://www.econbiz.de/10003751164
We assess the quality of opening and closing prices for Nasdaq stocks by examining the effect that opening and closing call auctions (introduced in 2004) have had on price formation. Our use of measurement intervals of one minute or less sharpens the picture of intra-day volatility...
Persistent link: https://www.econbiz.de/10003831253