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On the Numerical Solution of Equilibria in Auction Models with Asymmetries within the Private-Values Paradigm

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  • Timothy P. Hubbard
  • Harry J. Paarsch

Abstract

We describe and compare numerical methods used to approximate equilibrium bid functions in models of auctions as games of incomplete information. In such games, private values are modelled as draws from bidder-specific type distributions and pay-your-bid rules are used to determine transactions prices. We provide a formal comparison of the performance of these numerical methods (based on speed and accuracy) and suggest ways in which they can be improved and extended as well as applied to new settings.

Suggested Citation

  • Timothy P. Hubbard & Harry J. Paarsch, 2012. "On the Numerical Solution of Equilibria in Auction Models with Asymmetries within the Private-Values Paradigm," Carlo Alberto Notebooks 291, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:291
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    References listed on IDEAS

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    Cited by:

    1. Rosa, Benjamin V., 2020. "Affirmative action subcontracting regulations in dynamic procurement auctions," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    2. Timothy P. Hubbard & Rene Kirkegaard, 2015. "Asymmetric Auctions with More Than Two Bidders," Working Papers 1502, University of Guelph, Department of Economics and Finance.
    3. Hickman Brent R. & Hubbard Timothy P. & Sağlam Yiğit, 2012. "Structural Econometric Methods in Auctions: A Guide to the Literature," Journal of Econometric Methods, De Gruyter, vol. 1(1), pages 67-106, August.
    4. Hickman Brent R. & Hubbard Timothy P. & Sağlam Yiğit, 2012. "Structural Econometric Methods in Auctions: A Guide to the Literature," Journal of Econometric Methods, De Gruyter, vol. 1(1), pages 67-106, August.

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    More about this item

    Keywords

    first-price auctions; asymmetric auctions; private-values model; numerical solutions.;
    All these keywords.

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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