Worst-case equilibria in first-price auctions

Vitali Gretschko and Helene Mass ()
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Helene Mass: University of Bonn, Institute for Microeconomics

Theoretical Economics, 2024, vol. 19, issue 1

Abstract: The usual analysis of bidding in first-price auctions assumes that bidders know the distribution of valuations. We analyze first-price auctions in which bidders do not know the precise distribution of their competitors' valuations, but only the mean of the distribution. We propose a novel equilibrium solution concept based on worst-case reasoning. We find an essentially unique and efficient worst-case equilibrium of the first-price auction, which has appealing properties from both the bidders' and the seller's point of view.

Keywords: Auctions; subjective-belief equilibria; uncertainty (search for similar items in EconPapers)
JEL-codes: D44 D81 D82 (search for similar items in EconPapers)
Date: 2024-01-26
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Worst-Case Equilibria in First-Price Auctions (2023)
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