Multi-bidder First Price Auction with Beliefs
Studies in Microeconomics, 2019, vol. 7, issue 1, 140-160
Abstract This paper characterizes the set of equilibria in the first price auction with multiple biddersâ€”specifically three bidders, each of whose type space is multi-dimensional, incorporating a bidderâ€™s beliefs about othersâ€™ valuations. In this auction, each bidder independently and privately learns the other two opponentsâ€™ valuations with some probability. This paper derives closed form solutions for equilibrium bidding behaviours parameterized by the degree of information when the bidder has homogeneous beliefs regarding each opponent. This paper demonstrates how much the level of information affects the bidding behaviours of the informed bidders. In addition, this paper extends the model into N bidders when a high value bidder has fixed beliefs that all other bidders are identical types, and show how the value of information changes as the number of participants increases. Finally, this paper speculates on the possible changes in the efficiency of the model from increasing the valuation space to an arbitrary number. JEL Classification: D44, D82, D83
Keywords: First price auction; information level; bidderâ€™s beliefs; multidimensional type space (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sae:miceco:v:7:y:2019:i:1:p:140-160
Access Statistics for this article
More articles in Studies in Microeconomics
Bibliographic data for series maintained by SAGE Publications ().