Multiple equilibria in bidding fee auctions

• Main Author: Castel-Branco, Miguel Moraes
• Publication Date: 2012
• Format: Master thesis
• Language: eng
• Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Download full: http://hdl.handle.net/10400.14/15551

This dissertation presents a game theoretic approach to bidding fee auctions with independent private values. I analyze these auctions under two bidding window rules. In a sequential bidding auction the round moves forward immediately after a bid was submitted. In a multiple round auction, the round moves forward only after all players have submitted their action. Under the assumption that the bidders may either have a low value or a high value for the object, I show that multiple equilibria, with relevantly different characteristics, may arise under either rule. Moreover, the rule that maximizes the seller’s revenue depends on the the probability of a high value bidder.