Equilibrium selection in common-value second-price auctions

Heng Liu

Games and Economic Behavior, 2014, vol. 84, issue C, 1-6

Abstract: This note considers equilibrium selection in common-value second-price auctions with two bidders. We show that for each ex post equilibrium in continuous and undominated strategies, a sequence of “almost common-value” auctions can be constructed such that each of them possesses a unique undominated and continuous equilibrium and the corresponding sequence of equilibria converges to that ex post equilibrium. As an implication, no equilibrium selection of this model based on perturbations seems to be more convincing than others.

Keywords: Equilibrium selection; Common value; Auctions (search for similar items in EconPapers)
JEL-codes: C72 D44 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:84:y:2014:i:c:p:1-6

DOI: 10.1016/j.geb.2013.12.003

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