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Competitive limit of competing auctions

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  • Ma, Zizhen
  • Riquelme, Nicolás

Abstract

We study the link between strategic equilibria of competing auctions and the “competitive distribution of auctions” (Peters, 1997). With minimal restrictions on each seller’s possible costs and feasible reserve prices, we show that as the number of players increases to infinity while fixing a positive buyer-to-seller ratio, symmetric perfect Bayesian equilibria of finite markets converge to the competitive equilibrium of the large market.

Suggested Citation

  • Ma, Zizhen & Riquelme, Nicolás, 2026. "Competitive limit of competing auctions," Games and Economic Behavior, Elsevier, vol. 158(C), pages 367-382.
    • Handle: RePEc:eee:gamebe:v:158:y:2026:i:c:p:367-382
    DOI: 10.1016/j.geb.2026.03.015
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    References listed on IDEAS

    as
    1. Michael Peters, 1997. "A Competitive Distribution of Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(1), pages 97-123.
    2. Hernando-Veciana, Angel, 2005. "Competition among auctioneers in large markets," Journal of Economic Theory, Elsevier, vol. 121(1), pages 107-127, March.
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    4. Novshek, William & Sonnenschein, Hugo, 1983. "Walrasian equilibria as limits of noncooperative equilibria. Part II: Pure strategies," Journal of Economic Theory, Elsevier, vol. 30(1), pages 171-187, June.
    5. Paul R. Milgrom & Robert J. Weber, 1985. "Distributional Strategies for Games with Incomplete Information," Mathematics of Operations Research, INFORMS, vol. 10(4), pages 619-632, November.
    6. Peters, Michael & Severinov, Sergei, 1997. "Competition among Sellers Who Offer Auctions Instead of Prices," Journal of Economic Theory, Elsevier, vol. 75(1), pages 141-179, July.
    7. Becker, Johannes Gerd & Damianov, Damian S., 2006. "On the existence of symmetric mixed strategy equilibria," Economics Letters, Elsevier, vol. 90(1), pages 84-87, January.
    8. Juan F. Escobar & Juuso Toikka, 2013. "Efficiency in Games With Markovian Private Information," Econometrica, Econometric Society, vol. 81(5), pages 1887-1934, September.
    9. Philip J Reny & Motty Perry, 2006. "Toward a Strategic Foundation for Rational Expectations Equilibrium," Econometrica, Econometric Society, vol. 74(5), pages 1231-1269, September.
    10. Kyungmin Kim & Philipp Kircher, 2015. "Efficient Competition Through Cheap Talk: The Case of Competing Auctions," Econometrica, Econometric Society, vol. 83(5), pages 1849-1875, September.
    11. Rustichini, Aldo & Satterthwaite, Mark A & Williams, Steven R, 1994. "Convergence to Efficiency in a Simple Market with Incomplete Information," Econometrica, Econometric Society, vol. 62(5), pages 1041-1063, September.
    12. Paulo Barelli & Srihari Govindan & Robert Wilson, 2024. "Strategic Foundations of Efficient Rational Expectations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(6), pages 3190-3216.
    13. Erik J. Balder, 1988. "Generalized Equilibrium Results for Games with Incomplete Information," Mathematics of Operations Research, INFORMS, vol. 13(2), pages 265-276, May.
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    More about this item

    Keywords

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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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