Dominance solvability of second-price auctions with differential information

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12 Scopus citations

Abstract

We study a class of common-value second-price auctions with differential and finite information. This class is characterized by the property that each bidder's information set is connected with respect to the common value. We show that the entire class is dominance solvable, and that there is a natural single-valued selection from the resulting set of sophisticated equilibria. Additionally, it is shown that bidder's information advantage over other bidders is rewarded in sophisticated equilibria.

Original languageEnglish
Pages (from-to)247-258
Number of pages12
JournalJournal of Mathematical Economics
Volume37
Issue number3
DOIs
StatePublished - 1 Jan 2002

Keywords

  • Common-value second-price auctions
  • Differential information
  • Dominance solvability
  • Information advantage
  • Sophisticated equilibria

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