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Uncommon Knowledge in Multiparty Auctions

Author

Listed:
  • David Banks

    (Department of Statistical Science, Duke University, Durham, North Carolina 27708)

  • Yi Guo

    (Hudson River Trading, New York, New York 10007)

Abstract

The pure strategy Nash equilibrium (PSNE) solution to multiparty auctions makes the strong but unrealistic assumption that all participants share the same beliefs about the type distributions of the others, and that all know that this information is mutually known. This paper proposes two alternative analyses of such auction problems that do not make that presupposition. The first is based on a solution concept similar to the PSNE. The second is employs the level k thinking solution concept.

Suggested Citation

  • David Banks & Yi Guo, 2022. "Uncommon Knowledge in Multiparty Auctions," Decision Analysis, INFORMS, vol. 19(3), pages 220-228, September.
    • Handle: RePEc:inm:ordeca:v:19:y:2022:i:3:p:220-228
    DOI: 10.1287/deca.2022.0454
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    References listed on IDEAS

    as
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    5. Timothy C. Au & David Banks & Yi Guo, 2021. "Numerical Solution of Asymmetric Auctions," Decision Analysis, INFORMS, vol. 18(4), pages 321-334, December.
    6. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-889, July.
    7. Insua, Insua Rios & Rios, Jesus & Banks, David, 2009. "Adversarial Risk Analysis," Journal of the American Statistical Association, American Statistical Association, vol. 104(486), pages 841-854.
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