IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Approximation of Nash equilibria in Bayesian games

  • Olivier Armantier

    (Federal Reserve Bank of New York; University of Montreal; CIRANO and CIREQ, Montreal, Canada)

  • Jean-Pierre Florens

    (Toulouse School of Economics, France)

  • Jean-Francois Richard

    (Department of Economics, University of Pittsburgh, Pennsylvania, USA)

We define a new concept of constrained strategic equilibrium (CSE) for Bayesian games. We show that a sequence of CSEs approximates an equilibrium under standard conditions. We also provide an algorithm to implement the CSE approximation method numerically in a broad class of Bayesian games, including games without analytically tractable solutions. Finally, we illustrate the flexibility of the CSE approximation with a series of auction examples, including a complex multi-unit auction. Copyright © 2008 John Wiley & Sons, Ltd.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1002/jae.1040
File Function: Link to full text; subscription required
Download Restriction: no

File URL: http://qed.econ.queensu.ca:80/jae/2008-v23.7/
File Function: Supporting data files and programs
Download Restriction: no

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 23 (2008)
Issue (Month): 7 ()
Pages: 965-981

as
in new window

Handle: RePEc:jae:japmet:v:23:y:2008:i:7:p:965-981
Contact details of provider: Web page: http://www.interscience.wiley.com/jpages/0883-7252/

Order Information: Web: http://www3.interscience.wiley.com/jcatalog/subscribe.jsp?issn=0883-7252 Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Philip J. Reny & Shmuel Zamir, 2002. "On the Existence of Pure Strategy Monotone Equilibria in Asymmetric First-Price Auctions," Discussion Paper Series dp292, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  2. Philip J. Reny, 2005. "On the Existence of Monotone Pure Strategy Equilibria in Bayesian Games," Levine's Working Paper Archive 784828000000000067, David K. Levine.
  3. David McAdams, 2006. "Monotone Equilibrium in Multi-Unit Auctions," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 1039-1056.
  4. David McAdams, 2003. "Isotone Equilibrium in Games of Incomplete Information," Econometrica, Econometric Society, vol. 71(4), pages 1191-1214, 07.
  5. Armantier, O. & Florens, J.-P. & Richard, J.-F., 1997. "Equilibre approximatif et regle intuitive: une application aux appels d'offres dans l'industrie spatiale," Papers 97.487, Toulouse - GREMAQ.
  6. Lebrun, Bernard, 1996. "Existence of an Equilibrium in First Price Auctions," Economic Theory, Springer, vol. 7(3), pages 421-43, April.
  7. Erwann Sba� & Olivier Armantier, 2006. "Estimation and comparison of treasury auction formats when bidders are asymmetric," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 745-779.
  8. Marshall Robert C. & Raiff Matthew E. & Richard Jean-Francois & Schulenberg Steven P., 2006. "The Impact of Delivery Synergies on Bidding in the Georgia School Milk Market," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-51, February.
  9. Jérémie Gallien & Shobhit Gupta, 2007. "Temporary and Permanent Buyout Prices in Online Auctions," Management Science, INFORMS, vol. 53(5), pages 814-833, May.
  10. Bernard Lebrun, 2002. "Continuity of the first price auction Nash equilibrium correspondence," Economic Theory, Springer, vol. 20(3), pages 435-453.
  11. MacKie-Mason, Jeffrey K. & Wellman, Michael P., 2006. "Automated Markets and Trading Agents," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 28, pages 1381-1431 Elsevier.
  12. Van Zandt, Timothy & Vives, Xavier, 2003. "Monotone Equilibria in Bayesian Games of Strategic Complementarities," CEPR Discussion Papers 4103, C.E.P.R. Discussion Papers.
  13. Bernard Lebrun, 1996. "Existence of an equilibrium in first price auctions (*)," Economic Theory, Springer, vol. 7(3), pages 421-443.
  14. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321.
  15. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
  16. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, vol. 7(2), pages 193-220, September.
  17. Horowitz, Joel L, 1992. "A Smoothed Maximum Score Estimator for the Binary Response Model," Econometrica, Econometric Society, vol. 60(3), pages 505-31, May.
  18. Maskin, Eric & Riley, John, 2000. "Equilibrium in Sealed High Bid Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 439-54, July.
  19. Philippe Février & Raphaële Preget & Michael Visser, 2002. "Econometrics of Share Auctions," Working Papers 2002-09, Centre de Recherche en Economie et Statistique.
  20. Emmanuel Guerre & Isabelle Perrigne & Quang Vuong, 2000. "Optimal Nonparametric Estimation of First-Price Auctions," Econometrica, Econometric Society, vol. 68(3), pages 525-574, May.
  21. Patrick Bajari, 2001. "Comparing competition and collusion: a numerical approach," Economic Theory, Springer, vol. 18(1), pages 187-205.
  22. Matias Eklöf, 2005. "Assessing Social Costs Of Inefficient Procurement Design," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 826-850, 06.
  23. Engelbrecht-Wiggans, Richard & Kahn, Charles M., 1998. "Multi-Unit Pay-Your-Bid Auctions with Variable Awards," Games and Economic Behavior, Elsevier, vol. 23(1), pages 25-42, April.
  24. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-89, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:jae:japmet:v:23:y:2008:i:7:p:965-981. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.