Auction Design with Heterogeneous Priors

Hien Pham and Takuro Yamashita

No 21-1260, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We consider an auction design problem with private values, where the seller and bidders may enjoy heterogeneous priors about their (possibly correlated) valuations. Each bidder forms an (interim) belief about the others based on his own prior updated by observing his own value. If the seller faces uncertainty about the bidders’ priors, even if he knows that the bidders’ priors are within any given distance from his, he may find it worst-case optimal to propose a dominant-strategy auction mechanism.

Date: 2021-11, Revised 2023-03
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Journal Article: Auction design with heterogeneous priors (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:126163

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