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Robust Competitive Auctions

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  • Seungjin Han

Abstract

This paper shows that a competitive distribution of auctions (Peters, 1997) is robust to the possibility of a seller's deviation not only to a direct mechanism, but rather to any arbitrary mechanism. It characterizes equilibrium allocations that are not only robust but also independent of market information transmission from buyers to sellers. For this type of equilibrium allocation, one only needs to design a market with a subset of direct mechanisms. In fact, a (constrained) ex-post efficient allocation is implemented by a market information-free robust equilibrium in a market with the set of second price auctions with reserve prices.

Suggested Citation

  • Seungjin Han, 2014. "Robust Competitive Auctions," Department of Economics Working Papers 2014-04, McMaster University, revised Oct 2014.
    • Handle: RePEc:mcm:deptwp:2014-04
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    References listed on IDEAS

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    1. Michael Peters & Balázs Szentes, 2012. "Definable and Contractible Contracts," Econometrica, Econometric Society, vol. 80(1), pages 363-411, January.
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    7. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
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    19. Coles, Melvyn G. & Eeckhout, Jan, 2003. "Indeterminacy and directed search," Journal of Economic Theory, Elsevier, vol. 111(2), pages 265-276, August.
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    Citations

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    Cited by:

    1. Attar, Andrea & Campioni, Eloisa & Piaser, Gwenaël, 2018. "On competing mechanisms under exclusive competition," Games and Economic Behavior, Elsevier, vol. 111(C), pages 1-15.
    2. Han, Seungjin, 2022. "General competing mechanism games with strategy-proof punishment," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    3. Seungjin Han, 2015. "Competing Mechanisms: Theory and Applications in Directed Search Markets," Department of Economics Working Papers 2015-07, McMaster University, revised May 2016.
    4. Peters, Michael, 2015. "Reciprocal contracting," Journal of Economic Theory, Elsevier, vol. 158(PA), pages 102-126.
    5. Ma, Gang & Zheng, Junjun & Wei, Ju & Wang, Shilei & Han, Yefan, 2021. "Robust optimization strategies for seller based on uncertainty sets in context of sequential auction," Applied Mathematics and Computation, Elsevier, vol. 390(C).
    6. Han Seungjin, 2016. "Sellers’ Implicit Collusion in Directed Search Markets," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 711-738, June.
    7. Lavi, Ron & Shamash, Elisheva S., 2022. "Principal-agent VCG contracts," Journal of Economic Theory, Elsevier, vol. 201(C).

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    More about this item

    Keywords

    competitive auctions; market information-free property; robust equilibrium; competing mechanism design;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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