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Jump Bidding and Overconcentration in Decentralized Simultaneous Ascending Auctions

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  • Zheng, Charles Zhoucheng

Abstract

A model of English auction that allows jump bidding is proposed. When two objects are sold separately via such English auctions, I construct an equilibrium such that bidders signal via jump bids, thereby forming rational expectations of the prices without relying on any central mediator. This equilibrium eliminates the exposure problem for a bidder whose valuation function is superadditive. Consequently, the auction game overly concentrates the goods to a multi-item bidder and never overly diffuses them to single-item bidders.

Suggested Citation

  • Zheng, Charles Zhoucheng, 2006. "Jump Bidding and Overconcentration in Decentralized Simultaneous Ascending Auctions," Staff General Research Papers Archive 12698, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:12698
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    File URL: http://www2.econ.iastate.edu/papers/p3860-2006-11-16.pdf
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    References listed on IDEAS

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    Cited by:

    1. Goeree, Jacob K. & Lien, Yuanchuan, 2014. "An equilibrium analysis of the simultaneous ascending auction," Journal of Economic Theory, Elsevier, vol. 153(C), pages 506-533.
    2. Jeremy Bulow & Jonathan Levin & Paul Milgrom, 2009. "Winning Play in Spectrum Auctions," Discussion Papers 08-023, Stanford Institute for Economic Policy Research.
    3. Sandro Brusco & Giuseppe Lopomo, 2009. "Simultaneous ascending auctions with complementarities and known budget constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 105-124, January.
    4. Lavi, Ron & Oren, Sigal, 2012. "Side-communication yields efficiency of ascending auctions: The two-items case," Games and Economic Behavior, Elsevier, vol. 76(2), pages 439-456.
    5. Sandro Brusco & Giuseppe Lopomo, 2008. "Budget Constraints And Demand Reduction In Simultaneous Ascending‐Bid Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 113-142, March.
    6. Lim, Wooyoung & Xiong, Siyang, 2021. "Does jump bidding increase sellers’ revenue? Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 84-110.

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    More about this item

    Keywords

    complementarity; auction; multiple object aucrtions; simultaneous auctions; synergy; exposure problem; threshold problem;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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