Auctions with asymmetric common-values: The first-price format

Maria-Angeles de Frutos and Xavier Jarque

No 146, Working Papers from Barcelona School of Economics

Abstract: We study the performance of the first-price format in auctions with asymmetric common-values. We show that, contrary to the result for second price auctions, a small advantage for one player translates only to small changes in bidders' strategies, and the equilibrium remains close to the first-price equilibrium of the original game. We characterize the equilibrium bidding strategies and their behavior as the degree of asymmetry increases. Finally, we compare the revenues at the optimal auction, the first price auction and the second price auction.

Keywords: Common-value auctions; asymmetric bidders; spectrum auctions (search for similar items in EconPapers)
JEL-codes: D44 D82 G34 (search for similar items in EconPapers)
Date: 2015-09
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Journal Article: Auctions with asymmetric common-values: The first-price format (2007)
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