On Rationalizability and Beliefs in Discrete Private-Value First-Price Auctions

Jack Robles and Makoto Shimoji

The B.E. Journal of Theoretical Economics, 2012, vol. 12, issue 1, 21

Abstract: We extend Dekel and Wolinsky's (2003) result on private-value first price auctions by providing different sufficient conditions under which each player has a unique rationalizable bid conditional on her value. Unlike Dekel and Wolinsky's, our result does not necessarily require a large number of players. If values are independently distributed, (i) our conditions are weaker than Dekel and Wolinsky's, and (ii) our conditions require a large number of players only if the distributions on values has a low reverse hazard rate for some value. Our result holds for the cases where players' utility functions are concave or values are not identically distributed.

Keywords: first-price auctions; rationalizability; dominance; beliefs (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1515/1935-1704.1829

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