Pure strategy equilibria of multidimensional and non-monotonic auctions

Humberto Moreira (), Aloisio Araujo and Luciano I. de Castro Filho
Authors registered in the RePEc Author Service: Luciano Irineu de Castro

No 571, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: We give necessary and sufficient conditions for the existence of symmetric equilibrium without ties in interdependent values auctions, with multidimensional independent types and no monotonic assumptions. In this case, non-monotonic equilibria might happen. When the necessary and sufficient conditions are not satisfied, there are ties with positive probability. In such case, we are still able to prove the existence of pure strategy equilibrium with an all-pay auction tie-breaking rule. As a direct implication of these results, we obtain a generalization of the Revenue Equivalence Theorem. From the robustness of equilibrium existence for all-pay auctions in multidimensional setting, an interpretation of our results can give a new justification to the use of tournaments in practice.

Date: 2004-11-01
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (9)

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Working Paper: Pure Strategy Equilibria of Multidimensional and Non-Monotonic Auctions (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:571

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