Sequential English Auctions with Shill Bidding
نویسندگان
چکیده
Shill bidding, where a seller masquerades as a buyer bidding for her own item to inflate the price, has challenged the classical auction theories. We show that with the possibility of shill bidding, a multi-round single-unit English auction has neither pure-nor mixed-strategy Perfect Bayesian Equilibria (PBE) when there is no gap between the seller's valuation and the lowest possible buyer valuation. If a PBE exists in the gap case, the reserve price in any round cannot be higher than the lowest possible buyer valuation.
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