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Lowest unique bid auctions with population uncertainty

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  • Mohlin, Erik
  • Östling, Robert
  • Wang, Joseph Tao-yi

Abstract

We characterize the unique Poisson–Nash equilibrium of the lowest unique bid auction (LUBA) when the number of bidders is uncertain and follows a Poisson distribution.

Suggested Citation

  • Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2015. "Lowest unique bid auctions with population uncertainty," Economics Letters, Elsevier, vol. 134(C), pages 53-57.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:53-57
    DOI: 10.1016/j.econlet.2015.06.009
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    References listed on IDEAS

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    1. Simone Pigolotti & Sebastian Bernhardsson & Jeppe Juul & Gorm Galster & Pierpaolo Vivo, 2011. "Equilibrium strategy and population-size effects in lowest unique bid auctions," Papers 1105.0819, arXiv.org, revised Feb 2012.
    2. Andrea Gallice, 2009. "Lowest Unique Bid Auctions with Signals," Carlo Alberto Notebooks 112, Collegio Carlo Alberto, revised Sep 2009.
    3. Paul Klemperer, 1999. "Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-286, July.
    4. Roger B. Myerson, 1998. "Population uncertainty and Poisson games," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(3), pages 375-392.
    5. Myerson, Roger B., 2000. "Large Poisson Games," Journal of Economic Theory, Elsevier, vol. 94(1), pages 7-45, September.
    6. Marco Scarsini & Eilon Solan & Nicolas Vieille, 2010. "Lowest Unique Bid Auctions," Papers 1007.4264, arXiv.org.
    7. Simone Pigolotti & Sebastian Bernhardsson & Jeppe Juul & Gorm Galster & Pierpaolo Vivo, 2012. "Equilibrium strategy and population-size effects in lowest unique bid auctions," Post-Print hal-00681002, HAL.
    8. Robert Östling & Joseph Tao-yi Wang & Eileen Y. Chou & Colin F. Camerer, 2011. "Testing Game Theory in the Field: Swedish LUPI Lottery Games," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 1-33, August.
    9. Raviv, Yaron & Virag, Gabor, 2009. "Gambling by auctions," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 369-378, May.
    10. Enrico Diecidue & Ulrich Schmidt & Peter P. Wakker, 2004. "The Utility of Gambling Reconsidered," Journal of Risk and Uncertainty, Springer, vol. 29(3), pages 241-259, December.
    11. Harold Houba & Dinard Laan & Dirk Veldhuizen, 2011. "Endogenous entry in lowest-unique sealed-bid auctions," Theory and Decision, Springer, vol. 71(2), pages 269-295, August.
    12. Costa-Gomes, Miguel A. & Shimoji, Makoto, 2014. "Theoretical approaches to lowest unique bid auctions," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 16-24.
    13. Klemperer, Paul, 1999. " Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-86, July.
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    Citations

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    Cited by:

    1. Mikhail Drugov & Dmitry Ryvkin, 2019. "The shape of luck and competition in tournaments," Working Papers w0251, Center for Economic and Financial Research (CEFIR).
    2. Boosey, Luke & Brookins, Philip & Ryvkin, Dmitry, 2017. "Contests with group size uncertainty: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 105(C), pages 212-229.
    3. Paolo Riccardo Morganti, 2021. "Extreme Value Theory and Auction Models," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(2), pages 1-15, Abril - J.
    4. Boosey, Luke & Brookins, Philip & Ryvkin, Dmitry, 2019. "Contests between groups of unknown size," Games and Economic Behavior, Elsevier, vol. 113(C), pages 756-769.
    5. Yamada, Takashi & Hanaki, Nobuyuki, 2016. "An experiment on Lowest Unique Integer Games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 88-102.
    6. Erik Mohlin & Robert Ostling & Joseph Tao-yi Wang, 2014. "Learning by Imitation in Games: Theory, Field, and Laboratory," Economics Series Working Papers 734, University of Oxford, Department of Economics.
    7. Nava Kahana & Doron Klunover, 2015. "A note on Poisson contests," Public Choice, Springer, vol. 165(1), pages 97-102, October.
    8. Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2020. "Learning by similarity-weighted imitation in winner-takes-all games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 225-245.
    9. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Winner-Take-All Tournaments," CEPR Discussion Papers 12067, C.E.P.R. Discussion Papers.
    10. Ryvkin, Dmitry & Drugov, Mikhail, 2020. "The shape of luck and competition in winner-take-all tournaments," Theoretical Economics, Econometric Society, vol. 15(4), November.
    11. Paolo Riccardo Morganti, 2021. "Extreme Value Theory and Auction Models," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(2), pages 1-15, Abril - J.
    12. Dmitry Ryvkin & Mikhail Drugov, 2017. "Tournaments," Working Papers wp2017_03_02, Department of Economics, Florida State University.

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    More about this item

    Keywords

    Lowest unique bid auction; Least unmatched price auction; Minbid game; Poisson game; Congestion game; Mixed equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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