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The private value single item bisection auction

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Author Info

  • Elena Grigorieva

    ()

  • P. Herings

    ()

  • Rudolf Müller

    ()

  • Dries Vermeulen

    ()

Abstract

In this paper we present a new iterative auction, the bisection auction, that can be used for the sale of a single indivisable object. We will show that the bisection auction is computationally more efficient than the classical English auction while it still preserves all characteristics the English auction shares with the Vickrey auction there exists an equilibrium in weakly dominant strategies in wich everyone truthfully reveals his information, the object is allocated in accordance with efficiency requirements to the buyer who has the highest valuation, and the price paid by the winner of the object equals the second-highest valuation.

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File URL: http://hdl.handle.net/10.1007/s00199-005-0032-z
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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 30 (2007)
Issue (Month): 1 (January)
Pages: 107-118

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Handle: RePEc:spr:joecth:v:30:y:2007:i:1:p:107-118

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Related research

Keywords: Single item auction; Weakly dominant strategy; Extensive form games of incomplete information; Information revelation; Binary search; C72; D44;

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References

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  1. Engelbrecht-Wiggans, R. & Kahn, C.M., 1990. "Protecting the Wnner: Second-price Versus Oral Auctions," University of Chicago - Economics Research Center 90-8, Chicago - Economics Research Center.
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Citations

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Cited by:
  1. Albin Erlanson, 2014. "The Duo-Item Bisection Auction," Computational Economics, Society for Computational Economics, vol. 43(1), pages 15-31, January.
  2. Grigorieva, Elena & Herings, P. Jean-Jacques & Müller, Rudolf & Vermeulen, Dries, 2007. "On The Fastest Vickrey Algorithm," Research Memorandum 013, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  3. Grigorieva, Elena & Jean-Jacques Herings, P. & Müller, Rudolf & Vermeulen, Dries, 2012. "Fraction auctions: The tradeoff between efficiency and running time," European Journal of Operational Research, Elsevier, vol. 220(2), pages 577-587.
  4. Grigorieva, Elena & Herings, P. Jean-Jacques & Müller, Rudolf & Vermeulen, Dries, 2006. "Inefficiency of equilibria in query auctions with continuous valuations," Research Memorandum 017, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  5. Dirk Bergemann & Achim Wambach, 2013. "Sequential Information Disclosure in Auctions," Cowles Foundation Discussion Papers 1900, Cowles Foundation for Research in Economics, Yale University.
  6. Erlanson, Albin, 2011. "The Multi-item Bisection Auction," Working Papers 2011:31, Lund University, Department of Economics.
  7. Grigorieva, Elena & Strobel, Martin, 2006. "Bidding behavior in the bisection auction – an experimental investigation," Research Memorandum 026, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  8. repec:hal:cesptp:hal-00641865 is not listed on IDEAS
  9. Grigorieva,Elena & Herings,Jean-Jacques & Müller,Rudolf & Vermeulen,Dries, 2004. "The communication complexity of private value single item auctions," Research Memorandum 052, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  10. Andersson, Tommy & Erlanson, Albin, 2012. "Multi-Item Vickery-English-Dutch Auctions," Working Papers 2012:17, Lund University, Department of Economics, revised 15 Jan 2013.
  11. Fadel, Ronald & Segal, Ilya, 2009. "The communication cost of selfishness," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1895-1920, September.
  12. Fleckinger, Pierre, 2008. "Bayesian improvement of the phantom voters rule: An example of dichotomic communication," Mathematical Social Sciences, Elsevier, vol. 55(1), pages 1-13, January.

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