Pure strategy equilibria of single and double auctions with interdependent values

Aloisio Araujo and Luciano de Castro

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: We prove the existence of monotonic pure strategy equilibrium for many types of asymmetric auctions with n bidders and unitary demands, interdependent values and independent types. The assumptions require monotonicity only in the own bidder's type. The payments can be a function of all bids. Thus, we provide a new equilibrium existence result for asymmetrical double auctions and a small number of bidders. The generality of our setting requires the use of special tie-breaking rules. We present a reasonable counterexample for interdependent values auctions that shows that sometimes all equilibria are trivial, that is, they have zero probability of trade. Nevertheless, we give sufficient conditions for non-trivial equilibrium existence.

Date: 2006-08
New Economics Papers: this item is included in nep-gth and nep-mic
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Journal Article: Pure strategy equilibria of single and double auctions with interdependent values (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we065320

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