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A “fractal” solution to the chopstick auction

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  • Christian Ewerhart

    (University of Zurich)

Abstract

This paper constructs a novel equilibrium in the chopstick auction of Szentes and Rosenthal (Games Econ Behav 44(1):114–133, 2003a). In contrast to the existing solution, the identified equilibrium strategy allows a simple and intuitive characterization. Moreover, its best-response set has the same Hausdorff dimension as its support, which may be seen as a robustness property. The analysis also reveals some new links to the literature on Blotto games.

Suggested Citation

  • Christian Ewerhart, 2022. "A “fractal” solution to the chopstick auction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1025-1041, November.
    • Handle: RePEc:spr:joecth:v:74:y:2022:i:4:d:10.1007_s00199-017-1052-1
    DOI: 10.1007/s00199-017-1052-1
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    References listed on IDEAS

    as
    1. Weinstein Jonathan, 2012. "Two Notes on the Blotto Game," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-13, March.
    2. Iryna Topolyan, 2014. "Rent-seeking for a public good with additive contributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(2), pages 465-476, February.
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    4. Szentes, Balazs, 2005. "Equilibrium transformations and the Revenue Equivalence Theorem," Journal of Economic Theory, Elsevier, vol. 120(2), pages 175-205, February.
    5. Ewerhart, Christian & Cassola, Nuno & Valla, Natacha, 2012. "Overbidding in fixed rate tenders: The role of exposure risk," Journal of Banking & Finance, Elsevier, vol. 36(2), pages 539-549.
    6. Brian Roberson, 2006. "The Colonel Blotto game," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 1-24, September.
    7. Englmaier, Florian & Guillén, Pablo & Llorente, Loreto & Onderstal, Sander & Sausgruber, Rupert, 2009. "The chopstick auction: A study of the exposure problem in multi-unit auctions," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 286-291, March.
    8. Shakun D. Mago & Roman M. Sheremeta, 2017. "Multi‐battle Contests: An Experimental Study," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 407-425, October.
    9. Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Chopstick auction; Exposure problem; Self-similarity; Blotto games;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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