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Competition Among Auctioneers

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  • Ángel Hernando Veciana

    ()
    (Universidad de Alicante)

Abstract

In this paper, we analyse a multistage game of competition among auctioneers. In a first stage, auctioneers commit to some publicly announced reserve prices, and in a second stage, bidders choose to participate in one of the auctions. We prove existence of Nash equilibria in mixed strategies for the whole game. We also show that one property of the equilibrium set is that when the numbers of auctioneers and bidders tend to infinity, almost all auctioneers with production cost low enough to trade announce a reserve price equal to their production costs. Our paper confirms previous results for some "limit" versions of the model by McAfee [9], Peters [13], and Peters and Severinov [18].

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2001-18.pdf
File Function: Fisrt version / Primera version, 2001
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2001-18.

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Length: 46 pages
Date of creation: Jun 2001
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2001-18

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Related research

Keywords: Auctions; Perfect Competition; Large Markets.;

References

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  1. Michael Peters & Sergei Severinov, 1995. "Competition Among Sellers who offer Auctions Instead of Prices," Working Papers peters-95-02, University of Toronto, Department of Economics.
  2. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
  3. Steven A. Matthews, 1995. "A Technical Primer on Auction Theory I: Independent Private Values," Discussion Papers 1096, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Allen, Beth & Hellwig, Martin, 1986. "Bertrand-Edgeworth Oligopoly in Large Markets," Review of Economic Studies, Wiley Blackwell, vol. 53(2), pages 175-204, April.
  5. Kenneth Burdett & Shouyong Shi & Randall Wright, 1998. "Pricing with frictions," Working Papers 98-9, Federal Reserve Bank of Philadelphia.
  6. Michael Peters, 1996. "Competition Among Mechanism Designers in a Common Value Environment," Working Papers peters-96-01, University of Toronto, Department of Economics.
  7. Peters, Michael, 2000. "Limits of Exact Equilibria for Capacity Constrained Sellers with Costly Search," Journal of Economic Theory, Elsevier, vol. 95(2), pages 139-168, December.
  8. Satterthwaite, Mark A & Williams, Steven R, 1989. "The Rate of Convergence to Efficiency in the Buyer's Bid Double Auction as the Market Becomes Large," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 477-98, October.
  9. Michael Peters, 1995. "On the Equivalence of Walrasian and Non-Walrasian Equilibria in Contract Markets: The case of Complete Contracts," Working Papers peters-95-01, University of Toronto, Department of Economics.
  10. Paul Milgrom & Robert Weber, 1981. "Distributional Strategies for Games with Incomplete Information," Discussion Papers 428R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Michael Peters, 1997. "Surplus Extraction and Competition," Working Papers peters-97-02, University of Toronto, Department of Economics.
  12. Peters, Michael, 1984. "Bertrand Equilibrium with Capacity Constraints and Restricted Mobility," Econometrica, Econometric Society, vol. 52(5), pages 1117-27, September.
  13. Epstein, Larry G. & Peters, Michael, 1999. "A Revelation Principle for Competing Mechanisms," Journal of Economic Theory, Elsevier, vol. 88(1), pages 119-160, September.
  14. Burguet, Roberto & Sakovics, Jozsef, 1999. "Imperfect Competition in Auction Designs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 231-47, February.
  15. Peters, Michael, 1997. "A Competitive Distribution of Auctions," Review of Economic Studies, Wiley Blackwell, vol. 64(1), pages 97-123, January.
  16. Williams, Steven R, 1991. "Existence and Convergence of Equilibria in the Buyer's Bid Double Auction," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 351-74, April.
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Cited by:
  1. Peters,M. & Severinov,S., 2001. "Internet auctions with many traders," Working papers 11, Wisconsin Madison - Social Systems.

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