Questions tagged [auctions]
Procedures in which participants submit bids, with resources being allocated among bidders in accordance with some pre-specified rule.
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All-pay auction question problem
In a sealed bid all pay auction, the highest bidder receives the good but
every buyer pays the seller the amount of her bid regardless of whether she
wins. Suppose there are two bidders whose ...
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Why does antitrust matter if we can just use auctions to get truthful reporting of marginal costs?
Why does antitrust matter if we can just use auctions to get truthful reporting of marginal costs? Like, if I want to get an oligopoly market to truthfully price items at socially optimal marginal ...
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Why is there no subgame perfect equilibrium in a sequential two-player first-price auction?
Consider a two-player first-price auction with complete information, in which players' values $V_2\geq V_1$ for the prize are commonly known. If the players tie, the winner is determined randomly (...
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All-pay auction
I am tasked with using the Revenue equivalence theorem to find the solution to the all-pay auction with $N$ players and $v_i \sim^{iid} U[0,1]$ values.
I understand the solution can be found as
$$
\...
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Is there any research about mechanism design with more than two choice variables?
In traditional mechanism design problem, there are only two choice variables (regardless the payoff function of agent is quasilinear or not), which makes the strictly increasing difference of payoff ...
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Auction with independent private values - An example from Game Theory: Analysis of Conflict by Roger Myerson
I have difficulties understanding the equilibrium analysis of the following auction game:
Suppose that there are $n$ bidders in an auction for a single indivisible object. Each player knows privately ...
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Define "Equilibrium" in Market Design task
in a current market design problem set I am very confused by the given questions.
We are often asked to find "an equilibirum of the [auction type, e.g. second-price auction]".
The amount of ...
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Equilibrium of Perturbed Dollar Auction Game - An Example from Game Theory: Analysis of Conflict by Roger Myerson
I am studying game theory using Myerson's textbook (Chapter 3 - Equilibria of Strategic-Form Games, Section 3.6 - The Decision-Analytic Approach to Games). I have difficulties understanding and ...
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Why do all filled bids receive the same rate, which is the rate of the lowest filled bid, during the US Treasury auction process?
This question pertains to the US Treasury auction process. {1} states:
Treasury auctions are designed to minimize the cost of financing the national debt by promoting broad, competitive bidding and ...
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The mathematical denotion of why each bidder bids the expected 2nd highest bidder's value in first-price auctions
Advanced Microeconomics by Jehle and Reny (p431) contains the following theorem:
And also these comments:
Because FN-1(·) is the distribution function of the highest value
among a bidder’s N - 1 ...
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Third price auction from Auction Theory by Krishna, Order statistics
Notation:
$Y_1$: Highest order statistics of $(N-1)$ players' valuation.
$F_n^M:$ The distribution function of the highest $n$th order statistics of $M$ players.
$f_n^M:$ The density of the highest $n$...
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Geometric interpretation of transfer function in incentive-compatible direct mechanism
Consider a set of players $i = 1,...,N$ who need to allocate some good. Each player $i$ valuates the good $v_i \in [0,1]$, with $v_i \sim f_i$. An individually rational direct mechanism $(p,c)$, with $...
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How widely can the objective of mechanism design be generalized?
The mechanism design lectures I've been watching have focused on the objective of maintaining performance guarantees in terms of either total surplus or total revenue/virtual surplus (while also ...
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Interpretation of the Myerson (1981) Bidder Utility (Optimal Auctions, Mechanism Design)
In Myerson 1981, the bidders' utility function does not make sense. $p_{i}$ is a probability of winning the auction, $t_i$ is the bidder's type (or valuation of the item), and $x_i$ is the payment. $r$...
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Understanding How to Counter the Winner's Curse
In both popular level books on economics/rationality/etc., and videos of actual economics lectures, I keep running into the suggestion to bid in a common value auction as though victory is already ...
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