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A Learning Approach to Auctions

  • Hon-Snir, Shlomit
  • Monderer, Dov
  • Sela, Aner

We analyze a repeated first-price auction in which the types of the players are determined before the first round. It is proved that if every player is using either a belief-based learning scheme with bounded recall or generalized fictitious play learning scheme, then for sufficiently large time, the players' bid are in equilibrium in the one-shot auction in which the types are commonly known.

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File URL: http://www.sciencedirect.com/science/article/B6WJ3-45J5B56-X/2/71355c85320d9c1eb4df6696eb1b45f8
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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 82 (1998)
Issue (Month): 1 (September)
Pages: 65-88

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Handle: RePEc:eee:jetheo:v:82:y:1998:i:1:p:65-88
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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  9. Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
  10. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
  11. J. Riley & E. Maskin, 1981. "Optimal Auctions with Risk Averse Buyers," Working papers 311, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. Thorlund-Petersen, Lars, 1990. "Iterative computation of cournot equilibrium," Games and Economic Behavior, Elsevier, vol. 2(1), pages 61-75, March.
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  17. Bikhchandani, Sushil, 1988. "Reputation in repeated second-price auctions," Journal of Economic Theory, Elsevier, vol. 46(1), pages 97-119, October.
  18. M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
  19. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
  20. Wilson, Robert, 1992. "Strategic analysis of auctions," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 8, pages 227-279 Elsevier.
  21. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
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  23. Paul Milgrom & John Roberts, 2010. "Adaptive and Sophisticated Learning in Repeated Normal-Form Games," Levine's Working Paper Archive 418, David K. Levine.
  24. Harris, Milton & Raviv, Artur, 1981. "Allocation Mechanisms and the Design of Auctions," Econometrica, Econometric Society, vol. 49(6), pages 1477-99, November.
  25. J. Robinson, 1969. "An Iterative Method of Solving a Game," Levine's Working Paper Archive 422, David K. Levine.
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