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|
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|Note:||Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.|
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- Matthews, Steven, 1987.
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Game Theory and Information
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- Smith, James L. & Levin, Dan, 1996. "Ranking Auctions with Risk Averse Bidders," Journal of Economic Theory, Elsevier, vol. 68(2), pages 549-561, February.
- Robert Wilson, 1977. "A Bidding Model of Perfect Competition," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 511-518.
- Burguet, Roberto & Sakovics, Jozsef, 1996. "Reserve Prices without Commitment," Games and Economic Behavior, Elsevier, vol. 15(2), pages 149-164, August.
- 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 421-29, April.
- 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.
- 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 417-41, October.
- Karlin, Samuel & Rinott, Yosef, 1980. "Classes of orderings of measures and related correlation inequalities. I. Multivariate totally positive distributions," Journal of Multivariate Analysis, Elsevier, vol. 10(4), pages 467-498, December.
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