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The Herodotus Paradox

Author

Listed:
  • Michael R. Baye

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • Dan Kovenock

    (Department of Economics, Tippie College of Business, University of Iowa)

  • Casper G. de Vries

    (Tinbergen Institute and Erasmus University Rotterdam)

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

  • Michael R. Baye & Dan Kovenock & Casper G. de Vries, 2010. "The Herodotus Paradox," Working Papers 2010-16, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    • Handle: RePEc:iuk:wpaper:2010-16
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    File URL: http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bepp2010-16-baye-kovenock-devries.pdf
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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.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. An analysis of the oldest auction in history
      by Economic Logician in Economic Logic on 2011-01-05 21:52:00

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    Cited by:

    1. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
    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.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L0 - Industrial Organization - - General

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