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Strategic Behavior in Ascending-Price Multiple-Object Auctions

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  • Menezes, Flávio Marques

Abstract

In this paper we examine an ascending-price multiple-object auction that has been used in the brazilian privatization process. We assume that artificially intelligent agents replace bidders in the game. We incorporate the existence of small players who cannot play strategically. Our results suggest that strategic bidders learn how to play in few rounds. We also conclude that as the number of players behaving sttategically decreases the solution approaches the competitive one. Thus, any predictions related to the results of the auctions must be conditional on the market structure.

Suggested Citation

  • Menezes, Flávio Marques, 1994. "Strategic Behavior in Ascending-Price Multiple-Object Auctions," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 14(1), April.
    • Handle: RePEc:sbe:breart:v:14:y:1994:i:1:a:2976
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    References listed on IDEAS

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    1. Menezes, F.M., 1993. "Ascending-Price Multiple-Object Auctions," Papers 254, Australian National University - Department of Economics.
    2. Holland, John H & Miller, John H, 1991. "Artificial Adaptive Agents in Economic Theory," American Economic Review, American Economic Association, vol. 81(2), pages 365-371, May.
    3. Menezes, Flavio Marques, 1993. "Leilões de privatização : uma análise de equílibrio," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 47(3), July.
    4. Marimon, Ramon & McGrattan, Ellen & Sargent, Thomas J., 1990. "Money as a medium of exchange in an economy with artificially intelligent agents," Journal of Economic Dynamics and Control, Elsevier, vol. 14(2), pages 329-373, May.
    5. Robert G. Hansen, 1988. "Auctions with Endogenous Quantity," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 44-58, Spring.
    6. Robert B. Wilson, 1987. "On Equilibria of Bid-Ask Markets," Palgrave Macmillan Books, in: George R. Feiwel (ed.), Arrow and the Ascent of Modern Economic Theory, chapter 11, pages 375-414, Palgrave Macmillan.
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