Bidding Reversals in a Multiple-Good Auction with Aggregate Reserve Price
نویسندگان
چکیده
In an auction for two heterogeneous goods, we show an “aggregate” reserve price leads to equilibria where bidders bid on one item to sabotage their own bid on the other, and bids are decreasing in valuations over a certain range.
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Deviations to other types’ equilibrium strategies. Let π(t̂, t) be the expected payoff of a bidder with type t̂ who makes the equilibrium bid of a bidder with type t. For t ≥ t∗∗, he wins the small item for free when his opponent has type tj > t, and the large object for B(t) otherwise, so π(t̂, t) = (1− t)u(t̂) + tU(t̂)− tE (max{r,X(s)} | s < t) = u(t̂) + tX(t̂)− t∗∗r − ∫ t t∗∗ X(s)ds ↓ ∂ ∂tπ(t̂, t) =...
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