Participation constraints in first-price auctions

Xiaoyong Cao (), Shao-Chieh Hsueh (), Guoqiang Tian and Wei Wang ()
Additional contact information
Xiaoyong Cao: University of International Business and Economics
Shao-Chieh Hsueh: School of Economics and Management at Xiamen University of Technology
Wei Wang: University of International Business and Economics

International Journal of Game Theory, 2024, vol. 53, issue 2, No 13, 609-634

Abstract: Abstract We study the endogenous participation problem when bidders are characterized by a two-dimensional private information on valuations and participation costs in first-price auctions. Bidders participate whenever their private costs are less than or equal to the expected revenue from participating. We show that there always exists an equilibrium in this general setting with two-dimensional types of ex-ante heterogeneous bidders. When bidders are ex-ante homogeneous, there is a unique symmetric equilibrium, but asymmetric equilibria may also exist. We provide conditions under which the equilibrium is unique (not only among symmetric ones). In the symmetric equilibrium, we show that the equilibrium cutoff of participation costs described above which bidders never participate, is lower when the distribution of participation costs is first-order stochastically dominated.

Keywords: Existence and uniqueness; Two-dimensional private information; First-price auctions; Participation costs; D42; D62; D82 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00182-023-00884-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jogath:v:53:y:2024:i:2:d:10.1007_s00182-023-00884-x

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/182/PS2

DOI: 10.1007/s00182-023-00884-x

Access Statistics for this article

International Journal of Game Theory is currently edited by Shmuel Zamir, Vijay Krishna and Bernhard von Stengel

More articles in International Journal of Game Theory from Springer, Game Theory Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().