Repeated First-Price Auctions
نویسنده
چکیده
We study a model of two-round, rst-price, sealed bid auctions with two bidders and two identical items. We assume that both bidders want to purchase both items and the bidders valuation for the object remains the same in both rounds. After the conclusion of the rst round, the winner and the winning bid are publicly announced. The bidders use this information to update their beliefs about the valuations of their opponent. We characterize the equilibrium for both the two type case and the uniformly distributed type case. We nd that compared to the standard results of one-shot rst-price auction, the bidders bid lower in the rst-round of our model. We also show that the rst-round loser bids more aggressively in the second-round than the rst-round winner. Lastly, we present that the two-round rst-price auction generates less revenue for the auctioneer than the two-round second-price auction. JEL Codes: C73, D44, D82 [email protected]. I would like to thank John Riley, Ichiro Obara and Hong Feng for helpful comments and suggestions. Conversations with Johannes Horner, Qingmin Liu, Yong Sui, Zhiyong Tu are also very helpful. However, errors are mine.
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