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Jump bidding and overconcentration in decentralized simultaneous ascending auctions

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  • Zheng, Charles Z.

Abstract

A model of English auctions is proposed to incorporate the possibility of jump bidding. When two objects are sold separately via such auctions, bidders signal their willingness to pay via jump bids, thereby forming rational expectations of the prices without relying on any central mediator. Hence a multi-item bidder does not suffer the exposure problem of having to buy an item while he is uncertain about the price of its complement. Single-item bidders, however, free-ride one another in competing against a multi-item bidder. Consequently, the auctions overly concentrate the goods to a multi-item bidder and never overly diffuse them to single-item bidders.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 76 (2012)
Issue (Month): 2 ()
Pages: 648-664

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Handle: RePEc:eee:gamebe:v:76:y:2012:i:2:p:648-664

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Web page: http://www.elsevier.com/locate/inca/622836

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Keywords: Auction; Multiple object auctions; Simultaneous auctions; Synergy; Complementarity; Exposure problem; Threshold problem;

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References

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  1. Krishna, V. & Rosenthal, R.W., 1995. "Simultaneous Auctions with Synergies," Papers 04-95-06, Pennsylvania State - Department of Economics.
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  4. Albano, Gian Luigi & Germano, Fabrizio & Lovo, Stefano, 2001. "A comparison of standard multi-unit auctions with synergies," Economics Letters, Elsevier, vol. 71(1), pages 55-60, April.
  5. Sandro Brusco & Giuseppe Lopomo, 2004. "Simultaneous Ascending Bid Auctions with Privately Known Budget Constraints," Levine's Bibliography 122247000000000373, UCLA Department of Economics.
  6. Bykowsky, Mark M. & Cull, Robert J. & Ledyard, John O., 1998. "Mutually Destructive Bidding: The FCC Auction Design Problem," Working Papers 916, California Institute of Technology, Division of the Humanities and Social Sciences.
  7. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521551847.
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  13. Paul Milgrom, . "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Working Papers 98002, Stanford University, Department of Economics.
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Citations

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Cited by:
  1. Jeremy Bulow & Jonathan Levin & Paul Milgrom, 2009. "Winning Play in Spectrum Auctions," NBER Working Papers 14765, National Bureau of Economic Research, Inc.
  2. Lavi, Ron & Oren, Sigal, 2012. "Side-communication yields efficiency of ascending auctions: The two-items case," Games and Economic Behavior, Elsevier, vol. 76(2), pages 439-456.
  3. Sandro Brusco & Giuseppe Lopomo, 2009. "Simultaneous ascending auctions with complementarities and known budget constraints," Economic Theory, Springer, vol. 38(1), pages 105-124, January.
  4. Jacob K. Goeree & Yuanchuan Lien, 2009. "An equilibrium analysis of the simultaneous ascending auction," IEW - Working Papers 428, Institute for Empirical Research in Economics - University of Zurich.

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