Dominance solvability of second-price auctions with differential information
AbstractWe study a class of common-value second-price auctions with differential information. This class of common-value auctions is characterized by the property that each player's information set is connected with respect to the common value. We showthat the entire class is dominance solvable, and that there is a natural single-valued selection from the resulting set of sophisticated equilibria. Additionally, it is shown that bidder's information advantage over others is rewarded in sophisticated equilibria.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2001007.
Date of creation: 00 Feb 2001
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common-value second-price auctions; differential information; connectedness with respect to common value; dominance solvability; sophisticated equilibria; information advantage;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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