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The Herodotus paradox

Author

Listed:
  • Baye, Michael R.
  • Kovenock, Dan
  • de Vries, Casper G.

Abstract

The Babylonian bridal auction, described by Herodotus, is regarded as one of the earliest uses of an auction in history. Yet, to our knowledge, the literature lacks a formal equilibrium analysis of this auction. We provide such an analysis for the two-player case with complete and incomplete information, and in so doing identify what we call the “Herodotus paradox.”

Suggested Citation

  • Baye, Michael R. & Kovenock, Dan & de Vries, Casper G., 2012. "The Herodotus paradox," Games and Economic Behavior, Elsevier, vol. 74(1), pages 399-406.
  • Handle: RePEc:eee:gamebe:v:74:y:2012:i:1:p:399-406
    DOI: 10.1016/j.geb.2011.07.004
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    References listed on IDEAS

    as
    1. Michael Baye & Dan Kovenock & Casper Vries, 2012. "Contests with rank-order spillovers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 315-350, October.
    2. Baye, Michael R. & Kovenock, Dan & de Vries, Casper G., 2012. "The Herodotus paradox," Games and Economic Behavior, Elsevier, vol. 74(1), pages 399-406.
    3. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-392, June.
    4. Bhattacharyya, Sugato & Lipman, Barton L, 1995. "Ex ante versus Interim Rationality and the Existence of Bubbles," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(3), pages 469-494, November.
    5. Maskin, Eric S & Riley, John G, 1984. "Optimal Auctions with Risk Averse Buyers," Econometrica, Econometric Society, vol. 52(6), pages 1473-1518, November.
    6. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
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    Citations

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    Cited by:

    1. Todd R. Kaplan & Shmuel Zamir, 2014. "Advances in Auctions," Discussion Papers 1405, Exeter University, Department of Economics.
    2. Ispano, Alessandro, 2015. "A note on the equilibria of the unbounded traveler’s dilemma," Mathematical Social Sciences, Elsevier, vol. 77(C), pages 52-54.
    3. Baye, Michael R. & Kovenock, Dan & de Vries, Casper G., 2012. "The Herodotus paradox," Games and Economic Behavior, Elsevier, vol. 74(1), pages 399-406.
    4. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications, Elsevier.

    More about this item

    Keywords

    Auctions; Contests; Mixed strategy; Interim equilibrium; Ex ante equilibrium; Fubiniʼs Theorem;

    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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