Bidding in a possibly common-value auction
We analyze a second-price auction with two bidders in which only one of the bidders is informed as to whether the object is valued commonly. We show that any equilibrium strategy of the bidder who is uninformed must be part of an equilibrium when both bidders instead know that the auction is not common value, regardless of the way in which the values are different. We derive sufficient conditions for equilibrium existence.
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References listed on IDEAS
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- Krishna, Vijay, 2003. "Asymmetric English auctions," Journal of Economic Theory, Elsevier, vol. 112(2), pages 261-288, October.
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UC3M Working papers. Economics
6139, Universidad Carlos III de Madrid. Departamento de Economía.
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- Parreiras Sergio O., 2006. "Affiliated Common Value Auctions with Differential Information: The Two Bidder Case," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-19, December.
- Milgrom, Paul R, 1981. "Rational Expectations, Information Acquisition, and Competitive Bidding," Econometrica, Econometric Society, vol. 49(4), pages 921-943, June.
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