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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- de Frutos, Maria-Angeles & Pechlivanos, Lambros, 2006.
"Second-price common-value auctions under multidimensional uncertainty,"
Games and Economic Behavior,
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- George Deltas & Richard Engelbrecht-Wiggans, 2005. "Naive Bidding," Management Science, INFORMS, vol. 51(3), pages 328-338, March.
- 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.
- Larson, Nathan, 2009. "Private value perturbations and informational advantage in common value auctions," Games and Economic Behavior, Elsevier, vol. 65(2), pages 430-460, March.
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