Asymmetric auctions: Perturbations, ε- equilibrium, and equilibrium

G.V.A. Dharanan and Alex Ellis

Games and Economic Behavior, 2024, vol. 147, issue C, 1-18

Abstract: We consider first-price auctions with independent and private valuations that have asymmetric valuation distributions and supports. We first show the existence of equilibrium in these auctions through a perturbation approach, thereby establishing that the limit of Bayesian Nash equilibria (BNE) of such perturbed auctions is indeed the Bayesian Nash equilibrium (BNE) of the limit auction with asymmetric supports. We then characterize this BNE and show that the ε-equilibrium (ε-BNE) of the auction with asymmetric supports is a BNE of “close” auctions with common supports. We then demonstrate some numerical examples.

Keywords: Auction theory; Bidding; Nash equilibrium; Game theory; Differential equations (search for similar items in EconPapers)
JEL-codes: C65 C70 C72 D44 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825624000848
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:147:y:2024:i:c:p:1-18

DOI: 10.1016/j.geb.2024.06.003

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().