Uncommon Knowledge in Multiparty Auctions

David Banks () and Yi Guo ()
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David Banks: Department of Statistical Science, Duke University, Durham, North Carolina 27708
Yi Guo: Hudson River Trading, New York, New York 10007

Decision Analysis, 2022, vol. 19, issue 3, 220-228

Abstract: The pure strategy Nash equilibrium (PSNE) solution to multiparty auctions makes the strong but unrealistic assumption that all participants share the same beliefs about the type distributions of the others, and that all know that this information is mutually known. This paper proposes two alternative analyses of such auction problems that do not make that presupposition. The first is based on a solution concept similar to the PSNE. The second is employs the level k thinking solution concept.

Keywords: adversarial risk analysis; asymmetric auctions; Bayesian methods; first-price auctions; level k thinking; pure strategy Nash equilibria (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ordeca:v:19:y:2022:i:3:p:220-228

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