IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2410.06150.html
   My bibliography  Save this paper

Scoring Auctions with Coarse Beliefs

Author

Listed:
  • Joseph Feffer

Abstract

This paper studies a simplicity notion in a mechanism design setting in which agents do not necessarily share a common prior. I develop a model in which agents participate in a prior-free game of (coarse) information acquisition followed by an auction. After acquiring information, the agents have uncertainty about the environment in which they play and about their opponents' higher-order beliefs. A mechanism admits a coarse beliefs equilibrium if agents can play best responses even with this uncertainty. Focusing on multidimensional scoring auctions, I fully characterize a property that allows an auction format to admit coarse beliefs equilibria. The main result classifies auctions into two sets: those in which agents learn relatively little about their setting versus those in which they must fully learn a type distribution to form equilibrium strategies. I then find a simple, primitive condition on the auction's rules to distinguish between these two classes. I then use the condition to categorize real-world scoring auctions by their strategic simplicity.

Suggested Citation

  • Joseph Feffer, 2024. "Scoring Auctions with Coarse Beliefs," Papers 2410.06150, arXiv.org.
    • Handle: RePEc:arx:papers:2410.06150
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2410.06150
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tilman Börgers & Jiangtao Li, 2019. "Strategically Simple Mechanisms," Econometrica, Econometric Society, vol. 87(6), pages 2003-2035, November.
    2. Mariann Ollár & Antonio Penta, 2017. "Full Implementation and Belief Restrictions," American Economic Review, American Economic Association, vol. 107(8), pages 2243-2277, August.
    3. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(2), pages 227-253, October.
    4. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-1050, July.
    5. Filip Matêjka & Alisdair McKay, 2015. "Rational Inattention to Discrete Choices: A New Foundation for the Multinomial Logit Model," American Economic Review, American Economic Association, vol. 105(1), pages 272-298, January.
    6. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    7. Gretschko, Vitali & Mass, Helene, 2024. "Worst-case equilibria in first-price auctions," Theoretical Economics, Econometric Society, vol. 19(1), January.
    8. John C. Harsanyi, 1968. "Games with Incomplete Information Played by "Bayesian" Players Part II. Bayesian Equilibrium Points," Management Science, INFORMS, vol. 14(5), pages 320-334, January.
    9. John Asker & Estelle Cantillon, 2008. "Properties of scoring auctions," RAND Journal of Economics, RAND Corporation, vol. 39(1), pages 69-85, March.
    10. Krishnendu Ghosh Dastidar, 2014. "Scoring auctions with non-quasilinear scoring rules," ISER Discussion Paper 0902, Institute of Social and Economic Research, Osaka University.
    11. MERTENS, Jean-François & ZAMIR, Shmuel, 1985. "Formulation of Bayesian analysis for games with incomplete information," LIDAM Reprints CORE 608, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    13. Wang, Mingxi & Liu, Shulin, 2014. "Equilibrium bids in practical multi-attribute auctions," Economics Letters, Elsevier, vol. 123(3), pages 352-355.
    14. Simon Gleyze & Agathe Pernoud, 2023. "Informationally Simple Incentives," Journal of Political Economy, University of Chicago Press, vol. 131(3), pages 802-837.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jorge González Chapela, 2019. "Weight Values, Scoring Rules and Abnormally Low Tenders Criteria in Multidimensional Procurement: Effects on Price," Hacienda Pública Española / Review of Public Economics, IEF, vol. 228(1), pages 55-81, March.
    2. Takeshi Nishimura, 2015. "Optimal design of scoring auctions with multidimensional quality," Review of Economic Design, Springer;Society for Economic Design, vol. 19(2), pages 117-143, June.
    3. Riccardo Camboni Marchi Adani, 2018. "Procuring price and quality using scoring auctions: where do we stand?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 17-36, March.
    4. Arnaud Wolff, 2019. "On the Function of Beliefs in Strategic Social Interactions," Working Papers of BETA 2019-41, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 219-249, June.
    6. Pierpaolo Battigalli, 2006. "Rationalization In Signaling Games: Theory And Applications," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 67-93.
    7. Battigalli, Pierpaolo, 2003. "Rationalizability in infinite, dynamic games with incomplete information," Research in Economics, Elsevier, vol. 57(1), pages 1-38, March.
    8. Miguel Vazquez & Michelle Hallack, 2017. "Efficiency versus transaction costs in multidimensional auctions: the case of Brazilian oil and gas lease auctions," IEFE Working Papers 94, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    9. Dastidar, Krishnendu Ghosh & Mukherjee, Diganta, 2014. "Corruption in delegated public procurement auctions," European Journal of Political Economy, Elsevier, vol. 35(C), pages 122-127.
    10. Battigalli Pierpaolo & Siniscalchi Marciano, 2003. "Rationalization and Incomplete Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-46, June.
    11. Ritesh Jain & Michele Lombardi & Antonio Penta, 2024. "Strategically Robust Implementation," Working Papers 1461, Barcelona School of Economics.
    12. NAKABAYASHI Jun & HIROSE Yohsuke, 2016. "Structural Estimation of the Scoring Auction Model," Discussion papers 16008, Research Institute of Economy, Trade and Industry (RIETI).
    13. Mukherjee, Saptarshi & Muto, Nozomu & Sen, Arunava, 2024. "Implementation in undominated strategies with applications to auction design, public good provision and matching," Journal of Economic Theory, Elsevier, vol. 216(C).
    14. Jain, Ritesh & Lombardi, Michele, 2022. "Continuous virtual implementation: Complete information," Journal of Mathematical Economics, Elsevier, vol. 99(C).
    15. Zhijuan Hong & Ruhai Wu & Yan Sun & Kunxiang Dong, 2020. "Buyer preferences for auction pricing rules in online outsourcing markets: fixed price vs. open price," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(1), pages 163-179, March.
    16. Renou, Ludovic & Schlag, Karl H., 2010. "Minimax regret and strategic uncertainty," Journal of Economic Theory, Elsevier, vol. 145(1), pages 264-286, January.
    17. Stephen Morris & Satoru Takahashi & Olivier Tercieux, 2012. "Robust Rationalizability Under Almost Common Certainty Of Payoffs," The Japanese Economic Review, Japanese Economic Association, vol. 63(1), pages 57-67, March.
    18. Chen, Yi-Chun & Mueller-Frank, Manuel & Pai, Mallesh M., 2022. "Continuous implementation with direct revelation mechanisms," Journal of Economic Theory, Elsevier, vol. 201(C).
    19. Stoll, Sebastian & Zöttl, Gregor, 2012. "Information Disclosure in Dynamic Buyer-Determined Procurement Auctions: An Empirical Study," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62044, Verein für Socialpolitik / German Economic Association.
    20. Albano, Gian Luigi & Cipollone, Angela & Paolo, Roberto Di & Ponti, Giovanni & Sparro, Marco, 2024. "Scoring rules in experimental procurement," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2410.06150. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.