Bidding against an unknown number of competitiors sharing affiliated information
In the general symmetric model of Milgrom and Weber, equilibrium bidding is analyzed with a stochastic number of bidders. the equilibrium strategies generalize the known expressions in a coherent way. For the equilibrium bid function of the first price auction, an interpretation involving 'marginal winning probabilities' is proposed. With ageneralized version of the linkage principle, the well-knownrevenue ranking theorems extend to a stochastic number of bidders. As an application, we show that the seller's generically optimal information policy regarding the number of competitors is concealing the information.
|Date of creation:||09 Jul 1997|
|Note:||Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.|
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- Vijay Krishna & John Morgan, 1994.
"An Analysis of the War of Attrition and the All-Pay Auction,"
Game Theory and Information
- Krishna, Vijay & Morgan, John, 1997. "An Analysis of the War of Attrition and the All-Pay Auction," Journal of Economic Theory, Elsevier, vol. 72(2), pages 343-362, February.
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- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Harstad, Ronald M. & Kagel, John H. & Levin, Dan, 1990. "Equilibrium bid functions for auctions with an uncertain number of bidders," Economics Letters, Elsevier, vol. 33(1), pages 35-40, May.
- Ronald M. Harstad & Dan Levin, 1985. "A Class of Dominance Solvable Common-Value Auctions," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 525-528.
- Harstad, Ronald M, 1990. "Alternative Common-Value Auction Procedures: Revenue Comparisons with Free Entry," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 421-429, April.
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- Matthews, Steven, 1987.
"Comparing Auctions for Risk Averse Buyers: A Buyer's Point of View,"
Econometric Society, vol. 55(3), pages 633-646, May.
- Steven A. Matthews, 1985. "Comparing Auctions for Risk Averse Buyers: A Buyer's Pointof View," Discussion Papers 664R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- French, Kenneth R & McCormick, Robert E, 1984. "Sealed Bids, Sunk Costs, and the Process of Competition," The Journal of Business, University of Chicago Press, vol. 57(4), pages 417-441, October.
- Smith, James L. & Levin, Dan, 1996. "Ranking Auctions with Risk Averse Bidders," Journal of Economic Theory, Elsevier, vol. 68(2), pages 549-561, February.
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