Name
Abstract | ||
|---|---|---|
We solve the Bayesian sequential equilibrium of a general class of single-item first-price or all-pay auctions of incomplete information. Our main contribution is a general methodology for solving the optimal commitment problem, in closed form, for asymmetric continuous-type distributions. Our approach consists of a number of innovations. We propose a modeling concept called equal-bid function to build a bridge between two players' strategies. Another concept called equal-utility curve transforms any commitment strategy into a weakly better continuous and everywhere directional-differentiable strategy. The optimal commitment functions in these auctions reveal some important insights. When the player with commitment power (the leader) has low valuation, he bids passively. This is a credible way to alleviate competition and to enable collusion. We demonstrate, via concrete examples, that this is a credible way to threaten the follower so that the leader can secure a higher utility. |
Year | DOI | Venue |
|---|---|---|
2016 | 10.1145/2940716.2940739 | EC |
Field | DocType | Citations |
Sequential equilibrium,Mathematical optimization,Mathematical economics,Computer science,Microeconomics,Common value auction,Valuation (finance),Complete information,Bayesian probability,Collusion | Conference | 2 |
PageRank | References | Authors |
0.39 | 11 | 3 |
Name | Order | Citations | PageRank |
|---|---|---|---|
| Pingzhong Tang | 1 | 133 | 32.06 |
| Zihe Wang | 2 | 17 | 3.72 |
| Xiaoquan (Michael) Zhang | 3 | 108 | 23.28 |