Inefficiency of equilibria in query auctions with continuous valuations

Grigorieva Elena, P. Jean-Jacques Herings (), Rudolf Müller and Dries Vermeulen

No 23, Research Memoranda from Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization

Abstract: Query auctions are iterative auctions in which bidders have to select in each round an action from a finite set. We show that, when bidders have continuous valuations, any ex post equilibrium in an ex post individually rational query auction can only be ex post efficient when the running time of the auction is infinite for almost all realizations of valuations of thebidders. Thus, when valuations are drawn from a continuous probability distribution, efficiency can only be bought at the expense of a running time that is infinite with probability one. For two bidders we even show this to be true when we only require efficiency with probability one.

Keywords: mathematical economics (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2009
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Related works:
Working Paper: Inefficiency of equilibria in query auctions with continuous valuations (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:umamet:2009023

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