IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/975.html
   My bibliography  Save this paper

Signally by Jump Bidding in Private Value Auctions

Author

Listed:
  • Ruqu Wang

    () (Queen's University)

  • Alan Gunderson

    (Industry Canada)

Abstract

This paper examines how a bidder can benefit from jump bidding by using the jump bid as a signal of a high valuation which causes other bidders to drop out of the auction earlier than they would otherwise. The information contained in a jump bid must be sufficient to induce a discrete change in the bidding behaviour of the other bidders. In an auction for a single item, a jump bid signals both the identity and the high valuation of a bidder. The existence of a beneficial jump bid equilibrium requires a gap in the distribution of the jump bidder and her identity must be concealed. Concealing the identity of the bidders permits the jump bidder to signal more information through the jump bid and thus she can benefit more from it. In an auction for multiple items, the jump bid signals a high valuation by the jump bidder.

Suggested Citation

  • Ruqu Wang & Alan Gunderson, 1998. "Signally by Jump Bidding in Private Value Auctions," Working Papers 975, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:975
    as

    Download full text from publisher

    File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_975.pdf
    File Function: First version 1998
    Download Restriction: no

    References listed on IDEAS

    as
    1. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1366-1400.
    2. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
    3. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    4. Christopher Avery, 1998. "Strategic Jump Bidding in English Auctions," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 185-210.
    5. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
    6. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    7. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    8. Chakravorti, Bhaskar, et al, 1995. "Auctioning the Airwaves: The Contest for Broadband PCS Spectrum," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 345-373, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zheng, Charles Z., 2012. "Jump bidding and overconcentration in decentralized simultaneous ascending auctions," Games and Economic Behavior, Elsevier, vol. 76(2), pages 648-664.
    2. LOVO, Stefano & ALBANO, Gian Luigi & GERMANO, Fabrizio, 2002. "On some collusive and signaling equilibria in ascending auctions for multiple objects," Les Cahiers de Recherche 765, HEC Paris.

    More about this item

    Keywords

    Auction; Jump Bidding;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:975. 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: (Mark Babcock). General contact details of provider: http://edirc.repec.org/data/qedquca.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.