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Partition Equilibria in a Japanese-English Auction with Discrete Bid Levels for the Wallet Game

Author

Listed:
  • Gonçalves, Ricardo

    (Católica Porto Business School and CEGE, Universidade Católica Portuguesa)

  • Ray, Indrajit

    (Economics Section, Cardiff Business School, Cardiff University,)

Abstract

We consider the set-up of a Japanese-English auction with exogenously fi xed discrete bid levels for the wallet game with two bidders, following Gonçalves and Ray (2017). We show that in this auction, partition equilibria exist that may be separating or pooling. We illustrate some separating and pooling equilibria with two and three discrete bid levels. We also compare the revenues of the seller from these equilibria and thereby nd the optimal choices of bid levels for these cases.

Suggested Citation

  • Gonçalves, Ricardo & Ray, Indrajit, 2017. "Partition Equilibria in a Japanese-English Auction with Discrete Bid Levels for the Wallet Game," CRETA Online Discussion Paper Series 34, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:34
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/creta/papers/manage/34_-_creta_ray.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Japanese-English auctions ; wallet game ; discrete bids; partitions ; pooling equilibrium; separating equilibrium. JEL classification numbers: C72 ; D44;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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