Revenue implications of choosing discrete bid levels in a Japanese-English auction

Ricardo Gonçalves; Indrajit Ray

doi:10.1007/s10058-023-00337-7

Revenue implications of choosing discrete bid levels in a Japanese-English auction

Ricardo Gonçalves^*, Indrajit Ray

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

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Abstract

We consider the set-up of a Japanese–English auction with exogenously fixed discrete bid levels for a specific game (the wallet game with two bidders, following Gonçalves and Ray in Econ Lett 159:177–179, 2017). We show that in this auction, partition equilibria exist that may be separating or pooling. We illustrate separating and pooling equilibria in games with two and three discrete bid levels and compare the revenues of the seller from these equilibria to find the optimal bid levels for these cases.

Original language	English
Pages (from-to)	125-150
Number of pages	26
Journal	Review of Economic Design
Volume	28
Issue number	1
DOIs	https://doi.org/10.1007/s10058-023-00337-7
Publication status	Published - Feb 2024

Keywords

Discrete bids
Japanese–English auctions
Partitions
Pooling equilibrium
Seller’s revenue
Separating equilibrium
Wallet game

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10.1007/s10058-023-00337-7Licence: CC BY

74330302Final published version, 894 KBLicence: CC BY

http://hdl.handle.net/10400.14/42402Licence: CC BY

Cite this

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abstract = "We consider the set-up of a Japanese–English auction with exogenously fixed discrete bid levels for a specific game (the wallet game with two bidders, following Gon{\c c}alves and Ray in Econ Lett 159:177–179, 2017). We show that in this auction, partition equilibria exist that may be separating or pooling. We illustrate separating and pooling equilibria in games with two and three discrete bid levels and compare the revenues of the seller from these equilibria to find the optimal bid levels for these cases.",

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N2 - We consider the set-up of a Japanese–English auction with exogenously fixed discrete bid levels for a specific game (the wallet game with two bidders, following Gonçalves and Ray in Econ Lett 159:177–179, 2017). We show that in this auction, partition equilibria exist that may be separating or pooling. We illustrate separating and pooling equilibria in games with two and three discrete bid levels and compare the revenues of the seller from these equilibria to find the optimal bid levels for these cases.

AB - We consider the set-up of a Japanese–English auction with exogenously fixed discrete bid levels for a specific game (the wallet game with two bidders, following Gonçalves and Ray in Econ Lett 159:177–179, 2017). We show that in this auction, partition equilibria exist that may be separating or pooling. We illustrate separating and pooling equilibria in games with two and three discrete bid levels and compare the revenues of the seller from these equilibria to find the optimal bid levels for these cases.

KW - Discrete bids

KW - Japanese–English auctions

KW - Partitions

KW - Pooling equilibrium

KW - Seller’s revenue

KW - Separating equilibrium

KW - Wallet game

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JO - Review of Economic Design

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Revenue implications of choosing discrete bid levels in a Japanese-English auction

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CEGE: Research Center in Management and Economics

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Revenue implications of choosing discrete bid levels in a Japanese-English auction

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CEGE: Research Center in Management and Economics

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