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Core-stable rings in second price auctions with common values

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  • Orzach, Ram
  • Forges, Françoise

Abstract

In a commonvalueauction in which the information partitions of the bidders are connected, all rings are core-stable. More precisely, the ex ante expected utilities of rings, at the (noncooperative) sophisticated equilibrium proposed by Einy et al. [Einy, E., Haimanko, O., Orzach, R., Sela, A., 2002. Dominance solvability of second-pricesauctions with differential information. Journal of Mathematical Economics 37, 247–258], describe a cooperative games in characteristic function form, in spite of the underlying strategic externalities. A ring is core-stable if the core of this characteristic function is not empty. Furthermore, every ring can implement its sophisticated equilibrium strategy by means of an incentive compatible mechanism. An example shows that, if the bidders’ information partitions are not connected, rings may no longer be core-stable.

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Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/7891.

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Date of creation: 2011
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Publication status: Published in Journal of Mathematical Economics, 2011, Vol. 47, no. 6. pp. 760-767.Length: 7 pages
Handle: RePEc:dau:papers:123456789/7891

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Keywords: Characteristic function; Partition form game; Core; Collusion; Bayesian game; Auctions;

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References

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  1. Francoise Forges & Jean-Francois Mertens & Rajiv Vohra, 2002. "The Ex Ante Incentive Compatible Core in the Absence of Wealth Effects," Econometrica, Econometric Society, Econometric Society, vol. 70(5), pages 1865-1892, September.
  2. Forges, Françoise & Barbar, Riham, 2007. "Collusion dans les enchères : quelques apports des jeux coopératifs," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/158, Paris Dauphine University.
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Cited by:
  1. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers, Ben-Gurion University of the Negev, Department of Economics 1303, Ben-Gurion University of the Negev, Department of Economics.
  2. Ezra Einy & Ori Haimanko & Diego Moreno & A. Sela & Benyamin Shitovitz, 2013. "Tullock contests with asymmetric information," Economics Working Papers we1314, Universidad Carlos III, Departamento de Economía.
  3. Ezra Einy & Ori Haimanko & Ram Orzach & Aner Sela, 2013. "Common-Value All-Pay Auctions With Asymmetric Information," Working Papers, Ben-Gurion University of the Negev, Department of Economics 1306, Ben-Gurion University of the Negev, Department of Economics.
  4. Einy, E & Haimanko, O & Moreno, D & Sela, A & Shitovitz, B, 2013. "Tullock Contests with Asymmetric Information," Discussion Papers 2013-11, Graduate School of Economics, Hitotsubashi University.

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