IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/975.html
   My bibliography  Save this paper

Signally By Jump Bidding In Private Value Auctions

Author

Listed:
  • Alan Gunderson

    (Industry Canada)

  • Ruqu Wang

Abstract

This paper examines how a bidder can benefit from jump bidding by using the jump bid as a signal of a high valuation which causes other bidders to drop out of the auction earlier than they would otherwise. The information contained in a jump bid must be sufficient to induce a discrete change in the bidding behaviour of the other bidders. In an auction for a single item, a jump bid signals both the identity and the high valuation of a bidder. The existence of a beneficial jump bid equilibrium requires a gap in the distribution of the jump bidder and her identity must be concealed. Concealing the identity of the bidders permits the jump bidder to signal more information through the jump bid and thus she can benefit more from it. In an auction for multiple items, the jump bid signals a high valuation by the jump bidder.

Suggested Citation

  • Alan Gunderson & Ruqu Wang, 1998. "Signally By Jump Bidding In Private Value Auctions," Working Paper 975, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:975
    as

    Download full text from publisher

    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_975.pdf
    File Function: First version 1998
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
    2. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    3. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1366-1400.
    4. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    5. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    6. repec:bla:jemstr:v:4:y:1995:i:2:p:267-343:a is not listed on IDEAS
    7. Chakravorti, Bhaskar, et al, 1995. "Auctioning the Airwaves: The Contest for Broadband PCS Spectrum," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 345-373, Summer.
    8. Bhaskar Chakravorti & William W. Sharkey & Yossef Spiegel & Simon Wilkie, 1995. "Auctioning the Airwaves: The Contest for Broadband pcs Spectrum," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 345-373, June.
    9. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
    10. Christopher Avery, 1998. "Strategic Jump Bidding in English Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 185-210.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. LOVO, Stefano & ALBANO, Gian Luigi & GERMANO, Fabrizio, 2002. "On some collusive and signaling equilibria in ascending auctions for multiple objects," HEC Research Papers Series 765, HEC Paris.
    2. Zheng, Charles Z., 2012. "Jump bidding and overconcentration in decentralized simultaneous ascending auctions," Games and Economic Behavior, Elsevier, vol. 76(2), pages 648-664.

    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. Peter Cramton, 1997. "The FCC Spectrum Auctions: An Early Assessment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 431-495, September.
    2. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
    3. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    4. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
    5. Richard Engelbrecht-Wiggans & Charles M. Kahn, 2005. "Low-Revenue Equilibria in Simultaneous Ascending-Bid Auctions," Management Science, INFORMS, vol. 51(3), pages 508-518, March.
    6. Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
    7. Roberto Burguet, 2000. "Auction theory: a guided tour," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 3-50, January.
    8. Cramton, Peter & Schwartz, Jesse A, 2000. "Collusive Bidding: Lessons from the FCC Spectrum Auctions," Journal of Regulatory Economics, Springer, vol. 17(3), pages 229-252, May.
    9. Nicolas Gruyer & Nathalie Lenoir, 2003. "Auctioning airport slots (?)," Economics Working Papers 01, LEEA (air transport economics laboratory), ENAC (french national civil aviation school).
    10. Cramton, Peter, 1998. "Ascending auctions," European Economic Review, Elsevier, vol. 42(3-5), pages 745-756, May.
    11. Peter Cramton, 2004. "Simultaneous Ascending Auction," Papers of Peter Cramton 04mit4, University of Maryland, Department of Economics - Peter Cramton, revised 2004.
    12. Michel Mougeot & Pierre Malgrange, 2002. "Présentation générale," Économie et Prévision, Programme National Persée, vol. 156(5), pages 1-7.
    13. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
    14. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1366-1400.
    15. Cramton, Peter, 1998. "The Efficiency of the FCC Spectrum Auctions," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 727-736, October.
    16. Peter Cramton & John McMillan & Paul Milgrom & Bradley Miller & Bridger Mitchell & Daniel Vincent & Robert Wilson, 1997. "Package Bidding for Spectrum Licenses," Papers of Peter Cramton 97cra1b, University of Maryland, Department of Economics - Peter Cramton.
    17. Jeremy T. Fox & Patrick Bajari, 2013. "Measuring the Efficiency of an FCC Spectrum Auction," American Economic Journal: Microeconomics, American Economic Association, vol. 5(1), pages 100-146, February.
    18. Claude Montmarquette & Jacques Robert, 1999. "Sequential Auctions with Multi-Unit Demand: Theory, Experiments and Simulations," CIRANO Working Papers 99s-46, CIRANO.
    19. Committee, Nobel Prize, 2020. "Improvements to auction theory and inventions of new auction formats," Nobel Prize in Economics documents 2020-2, Nobel Prize Committee.
    20. Cramton Peter & Schwartz Jesse A, 2002. "Collusive Bidding in the FCC Spectrum Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-20, December.

    More about this item

    Keywords

    Jump Bidding; Auction;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    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:qed:wpaper:975. 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: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    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.