Information Revelation and Random Entry in Sequential Ascending Auctions
We examine a model in which multiple buyers with single-unit demand are faced with an infinite sequence of auctions. New buyers arrive on the market probabilistically, and are each endowed with a constant private value. Moreover, objects also arrive on the market at random times, so the number of competitors and the degree of informational asymmetry among them may vary across from one auction to the next. We demonstrate by way of a simple example the inefficiency of the second-price sealed-bid auction in this setting, and therefore assume that each object is sold via ascending auction. We then characterize an efficient and fully revealing equilibrium for the game in which the objects are sold via ascending auctions. We show that each buyer's bids and payoffs depend only upon their rank amongst their competitors and the (revealed) values of those with lower values. Furthermore, strategies are memoryless---bids depend only upon the information revealed in the current auction, and not on any information that may have been revealed in earlier periods. We then demonstrate that the sequential ascending auction serves as an indirect mechanism that is equivalent---in our setting---to the dynamic marginal contribution mechanism introduced by Bergemann and Välimäki (2007) and generalized in Cavallo et al. (2007).
|Date of creation:||14 Feb 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Andrzej Skrzypacz & William Fuchs, 2007.
"Bargaining with Arrival of New Traders,"
2007 Meeting Papers
186, Society for Economic Dynamics.
- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Alvin E. Roth & Axel Ockenfels, 2002.
"Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet,"
American Economic Review,
American Economic Association, vol. 92(4), pages 1093-1103, September.
- Alvin E. Roth & Axel Ockenfels, . "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," Papers on Strategic Interaction 2002-32, Max Planck Institute of Economics, Strategic Interaction Group.
- Thomas D. Jeitschko, 1998. "Learning in Sequential Auctions," Southern Economic Journal, Southern Economic Association, vol. 65(1), pages 98-112, July.
- Sailer, Katharina, 2006.
"Searching the eBay Marketplace,"
Discussion Papers in Economics
1234, University of Munich, Department of Economics.
- Dirk Bergemann & Juuso Välimäki, 2007.
"Dynamic Marginal Contribution Mechanism,"
843644000000000300, UCLA Department of Economics.
- Dirk Bergemann & Juuso Valimaki, 2007. "Dynamic Marginal Contribution Mechanism," Cowles Foundation Discussion Papers 1616, Cowles Foundation for Research in Economics, Yale University.
- Juuso Valimaki & Dirk Bergemann, 2008. "Dynamic Marginal Contribution Mechanism," 2008 Meeting Papers 317, Society for Economic Dynamics.
- Roman Inderst, 2008. "Dynamic Bilateral Bargaining under Private Information with a Sequence of Potential Buyers," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 220-236, January.
- Thomas Kittsteiner & Jorg Nikutta & Eyal Winter, 2004.
"Declining Valuations in Sequential Auctions,"
Discussion Paper Series
dp385, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Caillaud, Bernard & Mezzetti, Claudio, 2004. "Equilibrium reserve prices in sequential ascending auctions," Journal of Economic Theory, Elsevier, vol. 117(1), pages 78-95, July.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:7160. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.