 Competing auctions with endogenous quantitiesBenny Moldovanu (), Aner Sela and Xianwen Shi Journal of Economic Theory, 2008, vol. 141, issue 1, 1-27 Abstract: Two sellers decide on their discrete supply of a homogenous good. There is a finite number of buyers with unit demand and privately known valuations. In the first model, there is a centralized market place where a uniform auction takes place. In the second, there are two distinct auction sites, each with one seller, and buyers decide where to bid. Using the theory of potential games, we show that in the one-site auction model there is always an equilibrium in pure-strategies. In contrast, if the distribution of buyers values has an increasing failure rate, and if the marginal cost of production is relatively low, there is no pure-strategy equilibrium where both sellers make positive profits in the competing sites model. We also identify conditions under which an equilibrium with a unique active site exists. We deal with the finite and discrete models by using several results about order statistics developed by Richard Barlow and Frank Proschan [R. Barlow, F. Proschan, Mathematical Theory of Reliability, Wiley, New York, 1965; R. Barlow, F. Proschan, Inequalities for linear combinations of order statistics from restricted families, Ann. Math. Statist. 37 (1966) 1593-1601; R. Barlow, F. Proschan, Statistical Theory of Reliability and Life Testing, McArdle Press, Silver Spring, 1975]. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:141:y:2008:i:1:p:1-27 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
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