Two-buyer sequential multiunit auctions with no overbidding

DOI10.1007/978-3-030-57980-7_1MaRDI QIDQ2109940zbMATH OpenOpenAlexFDO

Authors Mete Şeref Ahunbay, Brendan Lucier, Adrian Vetta

Publication date 21 December 2022

Full work available at URL https://arxiv.org/abs/2006.03142

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26) Games in extensive form (91A18)

Abstract: We study equilibria in two-buyer sequential second-price (or first-price) auctions for identical goods. Buyers have weakly decreasing incremental values, and we make a behavioural no-overbidding assumption: the buyers do not bid above their incremental values. Structurally, we show equilibria are intrinsically linked to a greedy bidding strategy. We then prove three results. First, any equilibrium consists of three phases: a competitive phase, a competition reduction phase and a monopsony phase. In particular, there is a time after which one buyer exhibits monopsonistic behaviours. Second, the declining price anomaly holds: prices weakly decrease over time at any equilibrium in the no-overbidding game, a fact previously known for equilibria with overbidding. Third, the price of anarchy of the sequential auction is exactly $1-1/e$.

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• How to bid in unified second-price auctions when requests are duplicated
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• The price of anarchy of two-buyer sequential multiunit auctions
• Equilibrium of a sequence of auctions when bidders demand multiple items
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