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Simultaneous auctions with budgets: Equilibrium existence and characterization
- Source :
- Games and Economic Behavior. 126:75-93
- Publication Year :
- 2021
- Publisher :
- Elsevier BV, 2021.
-
Abstract
- We study the sale of two units of a good through simultaneous sealed bid first-price auctions to bidders who have private types and multi-unit demand. Bidders are differentiated based on their valuations and budgets. Under a parametric restriction, we show that this auction game is better-reply secure and thus possesses a Nash equilibrium. In equilibrium, bidders expend their budgets. The equilibrium strategies are essentially pure in the sense that each bidder-type has a unique split (up to a permutation) of her budget between the two auctions. In equilibrium, there always exist bidder-types who submit unequal bids in equilibrium even though they have the same valuations for the units. In addition, the equilibrium is monotone in valuations and budgets: bidders with higher valuations (lower budgets) prefer more unequal splits of their budgets than bidders with lower valuations (higher budgets) and the same budget (valuation).
- Subjects :
- TheoryofComputation_MISCELLANEOUS
Economics and Econometrics
05 social sciences
TheoryofComputation_GENERAL
symbols.namesake
Monotone polygon
Nash equilibrium
0502 economics and business
Economics
symbols
Common value auction
050206 economic theory
050207 economics
Mathematical economics
Finance
Parametric statistics
Valuation (finance)
Subjects
Details
- ISSN :
- 08998256
- Volume :
- 126
- Database :
- OpenAIRE
- Journal :
- Games and Economic Behavior
- Accession number :
- edsair.doi...........7d38d98fa938cab168896d8e4d34dcad