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Core-stable rings in second price auctions with common values

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  • Forges, Françoise
  • Orzach, Ram

Abstract

In a common value auction in which the information partitions of the bidders are connected, all rings are core-stable. More precisely, the ex ante expected utilities of rings, at the (noncooperative) sophisticated equilibrium proposed by Einy et al. [Einy, E., Haimanko, O., Orzach, R., Sela, A., 2002. Dominance solvability of second-prices auctions with differential information. Journal of Mathematical Economics 37, 247–258], describe a cooperative games in characteristic function form, in spite of the underlying strategic externalities. A ring is core-stable if the core of this characteristic function is not empty. Furthermore, every ring can implement its sophisticated equilibrium strategy by means of an incentive compatible mechanism. An example shows that, if the bidders’ information partitions are not connected, rings may no longer be core-stable.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 47 (2011)
Issue (Month): 6 ()
Pages: 760-767

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Handle: RePEc:eee:mateco:v:47:y:2011:i:6:p:760-767

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Web page: http://www.elsevier.com/locate/jmateco

Related research

Keywords: Auctions; Bayesian game; Collusion; Core; Partition form game; Characteristic function;

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References

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Citations

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Cited by:
  1. Einy, E & Haimanko, O & Moreno, D & Sela, A & Shitovitz, B, 2013. "Tullock Contests with Asymmetric Information," Discussion Papers 2013-11, Graduate School of Economics, Hitotsubashi University.
  2. Ezra Einy & Ori Haimanko & Diego Moreno & A. Sela & Benyamin Shitovitz, 2013. "Tullock contests with asymmetric information," Economics Working Papers we1314, Universidad Carlos III, Departamento de Economía.
  3. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers 1303, Ben-Gurion University of the Negev, Department of Economics.
  4. Ezra Einy & Ori Haimanko & Ram Orzach & Aner Sela, 2013. "Common-Value All-Pay Auctions With Asymmetric Information," Working Papers 1306, Ben-Gurion University of the Negev, Department of Economics.

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