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Private monitoring in auctions [An article from: Journal of Economic Theory]
Book Details
Author(s)
A. Blume, P. Heidhues
Publisher
Elsevier
ISBN / ASIN
B000PAV02M
ISBN-13
978B000PAV026
Availability
Available for download now
Marketplace
United States 🇺🇸
Description
This digital document is a journal article from Journal of Economic Theory, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
We study infinitely repeated first-price auctions in which a bidder only learns whether or not he won the object. While repetition of the stage-game equilibrium is the unique Nash equilibrium in public strategies, with patient bidders there are simple Nash equilibria in private strategies that improve on bid rotation. Sequential rationality is appropriately captured by essentially perfect Bayesian equilibrium (EPBE), which ignores behavior after irrelevant histories. Our main result is the construction of EPBEa that improve upon bid rotation. Assuming symmetry, the exclusionary schemes of Skrzypacz and Hopenhayn [Tacit collusion in repeated auctions, J. Econ. Theory 114 (2004), 153-169], including asymptotically efficient ones, are supported as EPBEa.
Description:
We study infinitely repeated first-price auctions in which a bidder only learns whether or not he won the object. While repetition of the stage-game equilibrium is the unique Nash equilibrium in public strategies, with patient bidders there are simple Nash equilibria in private strategies that improve on bid rotation. Sequential rationality is appropriately captured by essentially perfect Bayesian equilibrium (EPBE), which ignores behavior after irrelevant histories. Our main result is the construction of EPBEa that improve upon bid rotation. Assuming symmetry, the exclusionary schemes of Skrzypacz and Hopenhayn [Tacit collusion in repeated auctions, J. Econ. Theory 114 (2004), 153-169], including asymptotically efficient ones, are supported as EPBEa.
