Common Value Auctions with Asymmetric Bidder Information
Author | : Priyodorshi Banerjee |
Publisher | : |
Total Pages | : 37 |
Release | : 2008 |
ISBN-10 | : OCLC:1290298490 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Common Value Auctions with Asymmetric Bidder Information written by Priyodorshi Banerjee and published by . This book was released on 2008 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study common value auctions with two asymmetrically informed bidders using a simple binary model. A unique, generically asymmetric, mixed-strategy equilibrium exists for the first-price auction. Bidders get positive payoffs, with a superiorly informed bidder getting a higher payoff. One of the bidders submits a higher bid than the other on average: aggressive bidding is not necessarily associated with inferiority of information. A continuum of pure-strategy equilibria exist for the second-price auction. If bidders play the unique symmetric equilibrium strategies, second-price auctions are generically revenue-dominant. A change in the degree of asymmetry in general has an ambiguous effect on revenue.