Core-stable rings in second price auctions with common values
AbstractIn 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 InfoPaper provided by Université Paris-Dauphine in its series Open Access publications from Université Paris-Dauphine with number urn:hdl:123456789/7891.
Date of creation: 2011
Date of revision:
Publication status: Published in Journal of Mathematical Economics (2011) v.47, p.760-767
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Characteristic function; Partition form game; Core; Collusion; Bayesian game; Auctions;
Other versions of this item:
- Françoise Forges & Ram Orzach, 2010. "Core-stable Rings in Second Price Auctions with Common Values," Working Papers 2010.119, Fondazione Eni Enrico Mattei.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-CTA-2012-02-20 (Contract Theory & Applications)
- NEP-GTH-2012-02-20 (Game Theory)
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