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Low and High Types of Bidders in Asymmetric Auctions with A General Utility Function

Author

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  • Yizhaq Minchuk

    (Department of Industrial Engineering and Management, Sami Shamoon College of Engineering, Israel)

Abstract

We study asymmetric first-price auctions with n bidders. We expand the results of Fibich et al. (2002) for asymmetric first-price auctions to a general utility function. We show that for low type bidders, the equality of equilibrium bids with symmetric, uniform distribution bids holds for the general case of a utility function. For high types of bidders, those with weaker distributions bid more aggressively than stronger bidders under mild assumptions of a utility function.

Suggested Citation

  • Yizhaq Minchuk, 2013. "Low and High Types of Bidders in Asymmetric Auctions with A General Utility Function," Economics Bulletin, AccessEcon, vol. 33(2), pages 1328-1332.
    • Handle: RePEc:ebl:ecbull:eb-13-00072
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    References listed on IDEAS

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    1. Eric Maskin & John Riley, 2000. "Equilibrium in Sealed High Bid Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 439-454.
    2. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 413-438.
    3. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-392, June.
    4. Timothy Hubbard & René Kirkegaard & Harry Paarsch, 2013. "Using Economic Theory to Guide Numerical Analysis: Solving for Equilibria in Models of Asymmetric First-Price Auctions," Computational Economics, Springer;Society for Computational Economics, vol. 42(2), pages 241-266, August.
    5. Fibich, Gadi & Gavious, Arieh & Sela, Aner, 2002. "Low and high types in asymmetric first-price auctions," Economics Letters, Elsevier, vol. 75(2), pages 283-287, April.
    6. Maskin, Eric S & Riley, John G, 1984. "Optimal Auctions with Risk Averse Buyers," Econometrica, Econometric Society, vol. 52(6), pages 1473-1518, November.
    7. Kirkegaard, René, 2009. "Asymmetric first price auctions," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1617-1635, July.
    8. René Kirkegaard, 2012. "A Mechanism Design Approach to Ranking Asymmetric Auctions," Econometrica, Econometric Society, vol. 80(5), pages 2349-2364, September.
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    Cited by:

    1. Yizhaq Minchuk, 2014. "Aggressive Bidding of Weak Bidders in All-Pay Auction," Economics Bulletin, AccessEcon, vol. 34(3), pages 1665-1668.

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    More about this item

    Keywords

    asymmetry; first-price auction.;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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