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Non-Existence of Equilibrium in Vickrey, Second-Price, and English Auctions

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Author Info
Jackson, Matthew O.

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Abstract

A simple example shows that equilibria can fail to exist in second price (Vickrey) and English auctions when there are both common and private components to bidders' valuations and private information is held on both dimensions. The example shows that equilibrium only exists in the extremes of pure private and pure common values, and that existence in standard models is not robust to a slight perturbation.

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Publisher Info
Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1241.

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Length: 8 pages
Date of creation: Nov 2005
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Handle: RePEc:clt:sswopa:1241

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Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125
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Keywords: general equilibrium; stability; experiments;

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  1. Moreira, Humberto Luiz Ataide & Araújo, Aloísio Pessoa de & Castro Filho, Luciano I. de Castro Filho, 2004. "Pure strategy equilibria of multidimensional and Non-monotonic auctions," Economics Working Papers (Ensaios Economicos da EPGE) 571, Graduate School of Economics, Getulio Vargas Foundation (Brazil). [Downloadable!]
  2. Simon, Leo K & Zame, William R, 1990. "Discontinuous Games and Endogenous Sharing Rules," Econometrica, Econometric Society, vol. 58(4), pages 861-72, July. [Downloadable!] (restricted)
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  3. Wolfgang Pesendorfer & Jeroen M. Swinkels, 2000. "Efficiency and Information Aggregation in Auctions," American Economic Review, American Economic Association, vol. 90(3), pages 499-525, June. [Downloadable!] (restricted)
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  4. Maskin, Eric & Riley, John, 2000. "Equilibrium in Sealed High Bid Auctions," Review of Economic Studies, Blackwell Publishing, vol. 67(3), pages 439-54, July.
  5. Matthew O. Jackson & Leo K. Simon & Jeroen M. Swinkels & William R. Zame, 2002. "Communication and Equilibrium in Discontinuous Games of Incomplete Information," Econometrica, Econometric Society, vol. 70(5), pages 1711-1740, September. [Downloadable!] (restricted)
  6. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September. [Downloadable!] (restricted)
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