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On some collusive and signaling equilibria in ascending auctions for multiple objects

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Author Info

  • LOVO, Stefano
  • ALBANO, Gian Luigi

    (ELSE and Department of Economics, University College London)

  • GERMANO, Fabrizio

    (Departamento d'Economia i Empresa, Universitat Pompeu Fabra)

Abstract

We consider two ascending auctions for multiple objects: the SEAMO (simultaneous English auction for multiple objects) and the the JAMO (Japanese auction for multiple objects). We first derive a (competitive) Perfect Bayesian Equilibrium of the JAMO by exploiting the strategic equivalence between the JAMO and the Survival Auction which consists of a finite sequence of sealed-bid auctions. Then, we prove that many of the (unwanted) collusive or signaling equilibria studied in the literature in the framework of the SEAMO do not have a counterpart in the JAMO. However, it is shown that certain collusive equilibria based on retaliatory strategies do exist in both auctions.

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Bibliographic Info

Paper provided by HEC Paris in its series Les Cahiers de Recherche with number 765.

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Length: 28 pages
Date of creation: 01 Sep 2002
Date of revision:
Handle: RePEc:ebg:heccah:0765

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Related research

Keywords: Multi-unit auctions; Ascending auctions; FCC auctions; Collusion; Retaliation;

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References

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  1. Athey, S., 1997. "Sigle Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Working papers 97-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
  3. Cramton, Peter, 1998. "Ascending auctions," European Economic Review, Elsevier, vol. 42(3-5), pages 745-756, May.
  4. Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA.
  5. Cramton Peter & Schwartz Jesse A, 2002. "Collusive Bidding in the FCC Spectrum Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-20, December.
  6. Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
  7. Vijay Krishna & Robert Rosenthal, 1995. "Simultaneous Auctions with Synergies," Papers 0056, Boston University - Industry Studies Programme.
  8. ALBANO, Gian Luigi & GERMANO, Fabrizio & LOVO, Stefano, . "A comparison of standard multi-unit auctions with synergies," CORE Discussion Papers RP -1556, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Ruqu Wang & Alan Gunderson, 1998. "Signally by Jump Bidding in Private Value Auctions," Working Papers 975, Queen's University, Department of Economics.
  10. Cramton, Peter & Schwartz, Jesse A, 2000. "Collusive Bidding: Lessons from the FCC Spectrum Auctions," Journal of Regulatory Economics, Springer, vol. 17(3), pages 229-52, May.
  11. Avery, Christopher, 1998. "Strategic Jump Bidding in English Auctions," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 185-210, April.
  12. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
  13. Anthony M. Kwasnica & Katerina Sherstyuk, 2001. "Collusion via Signaling in Multiple Object Auctions with Complementarities- An Experimental Test," Working Papers 200102, University of Hawaii at Manoa, Department of Economics.
  14. David McAdams, 2003. "Isotone Equilibrium in Games of Incomplete Information," Econometrica, Econometric Society, vol. 71(4), pages 1191-1214, 07.
  15. Milgrom, Paul, 1998. "Game theory and the spectrum auctions," European Economic Review, Elsevier, vol. 42(3-5), pages 771-778, May.
  16. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
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