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On some collusive and signaling equilibria in ascending auctions for multiple objects

  • LOVO, Stefano
  • ALBANO, Gian Luigi

    (ELSE and Department of Economics, University College London)

  • GERMANO, Fabrizio

    (Departamento d'Economia i Empresa, Universitat Pompeu Fabra)

We consider two ascending auctions for multiple objects: the SEAMO (simultaneous English auction for multiple objects) and the the JAMO (Japanese auction for multiple objects). We first derive a (competitive) Perfect Bayesian Equilibrium of the JAMO by exploiting the strategic equivalence between the JAMO and the Survival Auction which consists of a finite sequence of sealed-bid auctions. Then, we prove that many of the (unwanted) collusive or signaling equilibria studied in the literature in the framework of the SEAMO do not have a counterpart in the JAMO. However, it is shown that certain collusive equilibria based on retaliatory strategies do exist in both auctions.

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Paper provided by HEC Paris in its series Les Cahiers de Recherche with number 765.

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Length: 28 pages
Date of creation: 01 Sep 2002
Date of revision:
Handle: RePEc:ebg:heccah:0765
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  1. Stefano Lovo & Gian Luigi Albano & Fabrizio Germano, 1999. "A Comparison of Standard Multi-Unit Auctions with Synergies," Working Papers hal-00599418, HAL.
  2. Cramton Peter & Schwartz Jesse A, 2002. "Collusive Bidding in the FCC Spectrum Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-20, December.
  3. Athey, S., 1997. "Sigle Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Working papers 97-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Milgrom, Paul, 1998. "Game theory and the spectrum auctions," European Economic Review, Elsevier, vol. 42(3-5), pages 771-778, May.
  5. David McAdams, 2003. "Isotone Equilibrium in Games of Incomplete Information," Econometrica, Econometric Society, vol. 71(4), pages 1191-1214, 07.
  6. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
  7. Peter Cramton, 1998. "Ascending Auctions," Papers of Peter Cramton 98eer, University of Maryland, Department of Economics - Peter Cramton, revised 28 Jul 1998.
  8. Krishna, V. & Rosenthal, R.W., 1995. "Simultaneous Auctions with Synergies," Papers 04-95-06, Pennsylvania State - Department of Economics.
  9. Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
  10. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
  11. Cramton, Peter & Schwartz, Jesse A, 2000. "Collusive Bidding: Lessons from the FCC Spectrum Auctions," Journal of Regulatory Economics, Springer, vol. 17(3), pages 229-52, May.
  12. Ruqu Wang & Alan Gunderson, 1998. "Signally by Jump Bidding in Private Value Auctions," Working Papers 975, Queen's University, Department of Economics.
  13. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
  14. Anthony M. Kwasnica & Katerina Sherstyuk, 2001. "Collusion via Signaling in Multiple Object Auctions with Complementarities- An Experimental Test," Working Papers 200102, University of Hawaii at Manoa, Department of Economics.
  15. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
  16. Christopher Avery, 1998. "Strategic Jump Bidding in English Auctions," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 185-210.
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