Determining bidding strategies in sequential auctions: Quasi-linear utility and budget constraints

2007 ◽  
Vol 38 (8) ◽  
pp. 72-83 ◽  
Author(s):  
Hiromitsu Hattori ◽  
Makoto Yokoo ◽  
Yuko Sakurai ◽  
Toramatsu Shintani
Keyword(s):  
Sequential Auctions ◽  
Budget Constraints ◽  
Bidding Strategies ◽  
Linear Utility

scholarly journals Sequential auctions and price anomalies

2014 ◽  
Vol 59 (200) ◽  
pp. 7-42 ◽  
Author(s):  
Dejan Trifunovic
Keyword(s):  
Empirical Research ◽  
Theoretical Models ◽  
Sequential Auctions ◽  
English Auctions ◽  
Bidding Strategies ◽  
Empirical Results ◽  
Heterogeneous Objects ◽  
Increasing Trend ◽  
Private Values ◽  
Equilibrium Bidding

In sequential auctions objects are sold one by one in separate auctions. These sequential auctions might be organized as sequential first-price, second-price, or English auctions. We will derive equilibrium bidding strategies for these auctions. Theoretical models suggest that prices in sequential auctions with private values or with randomly assigned heterogeneous objects should have no trend. However, empirical research contradicts this result and prices exhibit a declining or increasing trend, which is called declining and increasing price anomaly. We will present a review of these empirical results, as well as different theoretical explanations for these anomalies.

scholarly journals First‐price auctions with budget constraints

2020 ◽  
Vol 15 (1) ◽  
pp. 199-237 ◽  
Author(s):  
Maciej H. Kotowski
Keyword(s):  
Sufficient Conditions ◽  
Budget Constraints ◽  
Symmetric Equilibrium ◽  
Bidding Strategies ◽  
Sealed Bid ◽  
Price Auction ◽  
Pure Strategies ◽  
Interdependent Valuations ◽  
Budget Levels

Consider a first‐price sealed‐bid auction with interdependent valuations and private budget constraints. Focusing on the two‐bidder case, we identify new sufficient conditions for the existence of a symmetric equilibrium in pure strategies. In equilibrium, agents may adopt discontinuous bidding strategies that result in a stratification of competition along the budget dimension. Private budgets can simultaneously lead to more aggressive bidding (a high‐budget agent leverages his wealth to outbid rivals) and more subdued bidding (competition becomes less intense among bidders at distinct budget levels). The presence of budget constraints may lead to multiple symmetric equilibria in the first‐price auction.

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