 Non-bidding equilibrium in an ascending core-selecting auctionGames and Economic Behavior, 2012, vol. 74, issue 2, 637-650 Abstract: This paper investigates the perfect Bayesian equilibrium in an ascending-price core-selecting auction, which is recently used in some countriesʼ spectrum license auctions. We suppose that there are two identical items, two small bidders, and one large bidder. The small bidders demand only one unit of the item, whereas the large bidder wants both units. Package bidding ensures that the large bidder faces no exposure problem and behaves truthfully. However, one of the small bidders stops bidding at the beginning in the equilibrium. Although small bidders generally face the free-rider problem and have incentives to underbid, once a bidder is the only small one remaining, he bids truthfully. Stopping early induces the remaining bidder to behave truthfully. Hence, each small bidder wants to be the first to stop bidding. The free-rider problem is considerably mitigated when there are many small bidders. Keywords: Auctions; Core-selecting auction; Ascending auction; Package clock auction; Free-rider problem (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:74:y:2012:i:2:p:637-650 DOI: 10.1016/j.geb.2011.08.016 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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