Hui: a Case Study of a Sequential Double Auction of Capital by Timothy P. Hubbard

For many immigrants, raising capital through conventional financial institutions (such as banks) is difficult, even impossible. In such circumstances, alternative institutions are often employed to facilitate borrowing and lending within the immigrant community. Using the theory of non-cooperative games under incomplete information, we analyze one such institution—the hu. i—which is essentially a sequential, double auction among the participants in a cooperative. Within the symmetric independent private-values paradigm, we construct the Bayes–Nash equilibrium of a sequential, first-price, sealed-bid auction game, and then use this structure to interpret field data gathered from a sample of hu. i held in Melbourne, Australia during the early 2000s.