Reputation in repeated second-price auctions

DOI10.1016/0022-0531(88)90151-2MaRDI QIDQ1106074zbMATH OpenOpenAlexFDO

Authors Sushil Bikhchandani

Publication date 1988

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/0022-0531(88)90151-2

zbMATH Keywords

asymmetric stage gameBayesian Nash equilibriumoptimal auctionrepeated auction settingrepeated game of incomplete informationsecond-price, common-value auctionssymmetric stage gametwo bidders

Mathematics Subject Classification ID

Multistage and repeated games (91A20) Other game-theoretic models (91A40) Auctions, bargaining, bidding and selling, and other market models (91B26)

Review text

A model in which two bidders take part in a series of second-price, common-value auctions is examined. The question of an optimal auction from an auctioneer's standpoint, in a repeated auction setting, is partially addressed. It is shown that the results from single auction models do not carry over to repeated auctions, when one of the bidders is endowed with a reputation for bidding aggressively. Second-price auctions with two bidders are highly susceptible to manipulative behaviour by an aggressive bidder, and yield much lower revenues to the auctioneer.

Recommendations

• Reputation in multi-unit ascending auction with common values
• Sequentially optimal auctions
• Reputational bidding
• Repeated common value auctions with asymmetric bidders
• Reserve prices in repeated auctions

Cites work

• A Bidding Model of Perfect Competition
• A Theory of Auctions and Competitive Bidding
• Communications to the editor: Competitive bidding with disparate information
• Games with Incomplete Information Played by ‘Bayesian’ Players, Part III. The Basic Probability Distribution of the Game
• Rational cooperation in the finitely repeated prisoners' dilemma
• Rational Expectations, Information Acquisition, and Competitive Bidding
• Reputation and imperfect information
• The Folk Theorem in Repeated Games with Discounting or with Incomplete Information
• Uniqueness of equilibrium in sealed high-bid auctions.

Cited in

(17)

• On some myths about sequenced common-value auctions
• A learning approach to auctions
• Coordination in auctions with entry
• Egalitarianism and efficiency in repeated symmetric games
• Hybrid auctions revisited
• Almost common value auctions and discontinuous equilibria
• Auctions with asymmetric common-values: the first-price format
• Reputation in multi-unit ascending auction with common values
• Repeated common value auctions with asymmetric bidders
• Second-price common-value auctions under multidimensional uncertainty
• Equilibria in open common value auctions
• Uninformed bidding in sequential auctions
• Reputational bidding
• Repeated Auctions with the Right of First Refusal
• Functional forms in studies of reputation in online auctions
• Bidding in a possibly common-value auction
• Bayesian inference in repeated English auctions

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