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

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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.

Suggested Citation

  • Alan Mehlenbacher, 2007. "Multiagent System Simulations of Sealed-Bid Auctions with Two-Dimensional Value Signals," Department Discussion Papers 0707, Department of Economics, University of Victoria.
    • Handle: RePEc:vic:vicddp:0707
    Note: ISSN 1914-2838
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    File URL: https://www.uvic.ca/socialsciences/economics/_assets/docs/discussion/ddp0707.pdf
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    Cited by:

    1. 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.
    2. Alan Mehlenbacher, 2007. "Multiagent System Platform for Auction Simulations," Department Discussion Papers 0706, Department of Economics, University of Victoria.
    3. Alan Mehlenbacher, 2007. "Multiagent System Simulations of Treasury Auctions," Department Discussion Papers 0709, Department of Economics, University of Victoria.

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    More about this item

    Keywords

    Axiomatic bargaining; resource monotonicity; transferable utility; risk aversion;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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