It is widely believed that the English auction is solved after the dominated strategies are eliminated. This opinion is formally confirmed only for one "ascending clock" auction and can not be generalized for most other English auctions. In this paper I show that the formal argument which is usually given in this context can not be derived from the dominance criterion alone, but that it can be used to prove that competitive bidding is the unique maximin strategy of a bidder who believes that his opponents do not play dominated strategies. Since the competitive bids also form a Nash equilibrium this result gives an unfamiliar but strong suppport for the established solution.
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Publisher Info
Paper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number
418.
Length: 18 pages Date of creation: Oct 1993 Date of revision: Handle: RePEc:bon:bonsfa:418
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany Fax: +49 228 73 9221 Web page: http://www.bgse.uni-bonn.de/index.php?id=517
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