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Multiagent System Simulations of Sealed-Bid Auctions with Two-Dimensional Value Signals

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Author Info
Alan Mehlenbacher () (Department of Economics, University of Victoria)
Abstract

This study uses a multiagent system to investigate how sealed-bid auction results vary across twodimensional value signals from pure private to pure common value. I find that several auction outcomes are significantly nonlinear across the two-dimensional value signals. As the common value percent increases, profit, revenue, and efficiency all decrease monotonically, but they decrease in different ways. Finally, I find that forcing revelation by the auction winner of the true common value may have beneficial revenue effects when the common-value percent is high and there is a high degree of uncertainty about the common value.

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File URL: http://web.uvic.ca/econ/research/papers/ddp0707.pdf
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Publisher Info
Paper provided by Department of Economics, University of Victoria in its series Department Discussion Papers with number 0707.

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Length: 51 pages
Date of creation: 19 Nov 2007
Date of revision:
Handle: RePEc:vic:vicddp:0707

Note: ISSN 1914-2838
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Web page: http://web.uvic.ca/econ
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Related research
Keywords: Axiomatic bargaining; resource monotonicity; transferable utility; risk aversion;

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Find related papers by JEL classification:
C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Philip A. Haile & Han Hong & Matthew Shum, 2003. "Nonparametric Tests for Common Values in First-Price Sealed-Bid Auctions," Cowles Foundation Discussion Papers 1445, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  2. Partha Dasgupta & Eric Maskin, 2000. "Efficient Auctions," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 341-388, May. [Downloadable!] (restricted)
    Other versions:
  3. Ockenfels, Axel & Selten, Reinhard, 2005. "Impulse balance equilibrium and feedback in first price auctions," Games and Economic Behavior, Elsevier, vol. 51(1), pages 155-170, April. [Downloadable!] (restricted)
    Other versions:
  4. Garvin, Susan & Kagel, John H., 1994. "Learning in common value auctions: Some initial observations," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 351-372, December. [Downloadable!] (restricted)
  5. Philippe Jehiel & Benny Moldovanu, 1998. "Efficient Design with Interdependent Valuations," Discussion Papers 1244, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  6. Neugebauer, Tibor & Selten, Reinhard, 2006. "Individual behavior of first-price auctions: The importance of information feedback in computerized experimental markets," Games and Economic Behavior, Elsevier, vol. 54(1), pages 183-204, January. [Downloadable!] (restricted)
  7. Camerer, Colin F. & Ho, Teck-Hua & Chong, Juin-Kuan, 2002. "Sophisticated Experience-Weighted Attraction Learning and Strategic Teaching in Repeated Games," Journal of Economic Theory, Elsevier, vol. 104(1), pages 137-188, May. [Downloadable!] (restricted)
  8. Susan Athey & Philip A. Haile, 2002. "Identification of Standard Auction Models," Econometrica, Econometric Society, vol. 70(6), pages 2107-2140, November. [Downloadable!] (restricted)
  9. repec:rus:hseeco:215327 is not listed on IDEAS
  10. Leigh Tesfatsion, 2002. "Agent-Based Computational Economics," Computational Economics 0203001, EconWPA, revised 15 Aug 2002. [Downloadable!]
  11. Selten, Reinhard & Joachim Buchta, 1994. "Experimental Sealed Bid First Price Auctions with Directly Observed Bid Functions," Discussion Paper Serie B 270, University of Bonn, Germany.
  12. Kenneth Hendricks & Joris Pinkse & Robert H. Porter, 2003. "Empirical Implications of Equilibrium Bidding in First--Price, Symmetric, Common Value Auctions," Review of Economic Studies, Blackwell Publishing, vol. 70(1), pages 115-145, January.
    Other versions:
  13. repec:att:wimass:1920013 is not listed on IDEAS
  14. Selten, Reinhard, 1998. "Features of experimentally observed bounded rationality," European Economic Review, Elsevier, vol. 42(3-5), pages 413-436, May. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alan Mehlenbacher, 2007. "Multiagent System Simulations of Treasury Auctions," Department Discussion Papers 0709, Department of Economics, University of Victoria. [Downloadable!]
  2. Alan Mehlenbacher, 2007. "Multiagent System Platform for Auction Simulations," Department Discussion Papers 0706, Department of Economics, University of Victoria. [Downloadable!]
  3. Alan Mehlenbacher, 2007. "Multiagent System Simulations of Signal Averaging in English Auctions with Two-Dimensional Value Signals," Department Discussion Papers 0708, Department of Economics, University of Victoria. [Downloadable!]
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