Auctions with asymmetric common-values: The first-price format
AbstractWe study the performance of the first-price format in auctions with asymmetric common-values. We show that, contrary to the result for second price auctions, a small advantage for one player translates only to small changes in bidders' strategies, and the equilibrium remains close to the first-price equilibrium of the original game. We characterize the equilibrium bidding strategies and their behavior as the degree of asymmetry increases. Finally, we compare the revenues at the optimal auction, the first price auction and the second price auction.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 43 (2007)
Issue (Month): 7-8 (September)
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Web page: http://www.elsevier.com/locate/jmateco
Other versions of this item:
- Mª Angeles De Frutos & Xavier Jarque, 2004. "Auctions with asymmetric common-values: The first-price format," Working Papers 146, Barcelona Graduate School of Economics.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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