The Unique-lowest Sealed-bid Auction

Harold Houba, Dinard van der Laan () and Dirk Veldhuizen ()
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Dinard van der Laan: VU University Amsterdam
Dirk Veldhuizen: VU University Amsterdam

No 08-049/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This discussion paper resulted in a publication in 'Theory and Decision' , 2011, 71(2), 269-295.

Unique-lowest sealed-bid auctions are auctions in which participation is endogenous and the winning bid is the lowest bid among all unique bids. Such auctions admit very many Nash equilibria (NEs) in pure and mixed strategies. The two-bidders' auction is similar to the Hawk-Dove game, which motivates to study symmetric NEs: Properties and comparative statics are derived and the symmetric NE with the lowest expected gains is the maximin in symmetric strategies, which allows computation through a mathematical program. Simulations provide numerical evidence that the symmetric NE with the lowest expected gains is the unique limit point of the replicator dynamics.

Keywords: Auctions; Sealed-Bid Auction; Evolutionary Stability; Endogenous Entry; Maximin (search for similar items in EconPapers)
JEL-codes: C61 C72 C73 D44 L83 (search for similar items in EconPapers)
Date: 2008-05-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080049

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