Auction design with heterogeneous priors

Hien Pham and Takuro Yamashita

Games and Economic Behavior, 2024, vol. 145, issue C, 413-425

Abstract: We consider an auction design problem with private values, where the seller and bidders may enjoy heterogeneous priors about their (possibly correlated) valuations. Each bidder forms an (interim) belief about the others based on his own prior updated by observing his own value. If the seller faces uncertainty about the bidders' priors, even if he knows that the bidders' priors are within any given distance from his, he may find it worst-case optimal to propose a dominant-strategy auction mechanism.

Keywords: Robust mechanism design; Worst case guarantee; Heterogeneous prior; Auction; Foundation for dominant-strategy mechanisms (search for similar items in EconPapers)
Date: 2024
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Working Paper: Auction Design with Heterogeneous Priors (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:145:y:2024:i:c:p:413-425

DOI: 10.1016/j.geb.2024.04.002

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