Uniqueness of equilibrium in sealed high-bid auctions

For the case of two buyers we show that equilibrium in the sealed high-bid auction is unique when (i) buyers' reservations prices are drawn independently from distributions with finite support and positive mass at the lower endpoint; (ii) buyers have private values; and (iii) buyers' prefe...

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Bibliographic Details
Published in:Games and economic behavior 2003-11, Vol.45 (2), p.395-409
Main Authors: Maskin, Eric, Riley, John
Format: Article
Language:English
Subjects:
Auctions
Bidding
Economics
Equilibrium
Equilibrium existence
Game theory
High-bid auctions
Human behaviour
Microeconomics
Risk
Uniqueness
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Summary:For the case of two buyers we show that equilibrium in the sealed high-bid auction is unique when (i) buyers' reservations prices are drawn independently from distributions with finite support and positive mass at the lower endpoint; (ii) buyers have private values; and (iii) buyers' preferences are log supermodular. For more than two buyers, we obtain the same result under the additional assumptions that (iv) buyers with the same reservation price have the same preferences; (v) buyers are risk neutral or risk averse with non-increasing absolute risk aversion; and (vi) the supports of the different buyers' distributions of reservation prices have the same upper endpoint.
ISSN:0899-8256
1090-2473
DOI:10.1016/S0899-8256(03)00150-7