Immediate Demand Reduction in Simultaneous Ascending Bid Auctions
11 Pages Posted: 17 Sep 2004
Date Written: October 2004
Abstract
The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one unit to every player and if bid increments are sufficiently small. In that unique equilibrium, bidders immediately reduce their demand to the efficient allocation, and the auction ends in the first round of bidding.
Keywords: Multi-unit auctions
JEL Classification: D44, D45
Suggested Citation: Suggested Citation
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