Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2008-05-16 Number: 08-049/1 Author-Name: Harold Houba Author-Email: email@example.com Author-Workplace-Name: VU University Amsterdam Author-Name: Dinard van der Laan Author-Email: firstname.lastname@example.org Author-Workplace-Name: VU University Amsterdam Author-Name: Dirk Veldhuizen Author-Email: email@example.com Author-Workplace-Name: VU University Amsterdam Title: The Unique-lowest Sealed-bid Auction Abstract: This discussion paper resulted in a publication in 'Theory and Decision', 2011, 71(2), 269-295.
Unique-lowest sealed-bid auctions are auctions in which participation is endogenous and the winning bid is the lowest bid among all unique bids. Such auctions admit very many Nash equilibria (NEs) in pure and mixed strategies. The two-bidders' auction is similar to the Hawk-Dove game, which motivates to study symmetric NEs: Properties and comparative statics are derived and the symmetric NE with the lowest expected gains is the maximin in symmetric strategies, which allows computation through a mathematical program. Simulations provide numerical evidence that the symmetric NE with the lowest expected gains is the unique limit point of the replicator dynamics. Classification-JEL: D44; C72; C73; C61; L83 Keywords: Auctions; Sealed-Bid Auction; Evolutionary Stability; Endogenous Entry; Maximin File-Url: http://papers.tinbergen.nl/08049.pdf File-Format: application/pdf File-Size: 296261 bytes Handle: RePEc:tin:wpaper:20080049