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A Simple Approach to Analyzing Asymmetric First Price Auctions

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  • Rene Kirkegaard

    ()
    (Department of Economics, Brock University)

Abstract

In this paper, we propose a new approach to analyzing asymmetric first price auctions. Specifically, we examine winning probabilities, exploiting the connection between winning probabilities and payoffs known from mechanism design. This circumvents the need to look directly at bidding strategies, which are generally complex. We derive new results, and more easily prove almost all existing results. The approach also sheds light on hitherto unexamined types of asymmetry. Moreover, the method also applies to asymmetric all-pay auctions, where all buyers pay their own bid, and about which little is currently known.

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File URL: ftp://coffee.econ.brocku.ca/RePec/pdf/0504.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Brock University, Department of Economics in its series Working Papers with number 0504.

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Length: 24 pages
Date of creation: Nov 2005
Date of revision: Nov 2005
Handle: RePEc:brk:wpaper:0504

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Related research

Keywords: Asymmetric Auctions; First Price Auctions; All-Pay Auctions; Winning Probabilities.;

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References

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  1. Lebrun, Bernard, 1998. "Comparative Statics in First Price Auctions," Games and Economic Behavior, Elsevier, vol. 25(1), pages 97-110, October.
  2. Elmar Wolfstetter & Michael Landsberger & Jakob Rubinstei & Shmuel Zamir, 1997. "First-Price Auctions when the Ranking of Valuations," Microeconomics 9701004, EconWPA.
  3. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-92, June.
  4. Estelle Cantillon, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," ULB Institutional Repository 2013/9001, ULB -- Universite Libre de Bruxelles.
  5. Blume, Andreas & Heidhues, Paul, 2004. "All equilibria of the Vickrey auction," Journal of Economic Theory, Elsevier, vol. 114(1), pages 170-177, January.
  6. Lebrun, Bernard, 1999. "First Price Auctions in the Asymmetric N Bidder Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-42, February.
  7. Eric Maskin & John Riley, 2003. "Uniqueness of Equilibrium in Sealed High-Bid Auctions," Economics Working Papers 0031, Institute for Advanced Study, School of Social Science.
  8. Plum, M, 1992. "Characterization and Computation of Nash-Equilibria for Auctions with Incomplete Information," International Journal of Game Theory, Springer, vol. 20(4), pages 393-418.
  9. Amann, Erwin & Leininger, Wolfgang, 1996. "Asymmetric All-Pay Auctions with Incomplete Information: The Two-Player Case," Games and Economic Behavior, Elsevier, vol. 14(1), pages 1-18, May.
  10. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 413-38, July.
  11. Fibich, Gadi & Gavious, Arieh & Sela, Aner, 2002. "Low and high types in asymmetric first-price auctions," Economics Letters, Elsevier, vol. 75(2), pages 283-287, April.
  12. Maskin, Eric & Riley, John, 2000. "Equilibrium in Sealed High Bid Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 439-54, July.
  13. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, vol. 7(2), pages 193-220, September.
  14. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-89, July.
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