First-price auctions with budget constraints

Artikel

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 resulting 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 15 ; Year: 2020 ; Issue: 1 ; Pages: 199-237 ; New Haven, CT: The Econometric Society

Classification and Topics

• Classification: Wirtschaft ; Auctions
• Subject: First-price auction ; budget constraints ; interdependent values

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kotowski, Maciej H.
• Event: Veröffentlichung
• (who): The Econometric Society
• (where): New Haven, CT
• (when): 2020

Further information

• DOI: doi:10.3982/TE2982
• Handle: http://hdl.handle.net/10419/217085
• Last update: 10.03.2025, 11:43 AM CET