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- Title
Simultaneous ascending auctions with complementarities and known budget constraints.
- Authors
Brusco, Sandro; Lopomo, Giuseppe
- Abstract
We study simultaneous ascending auctions of two identical objects when bidders are financially constrained and their valuations exhibit complementarities. We assume the budget constraints are known but the values for individual objects are private information, and characterize noncollusive equilibria. Equilibrium behavior is affected by the exposure problem. Bidders with higher budgets are more reluctant to bid, because opponents with lower budgets may end up pursuing a single object, thus preventing the realization of complementarities. Therefore poor bidders may win both objects when they do not have the highest valuation.
- Subjects
AUCTIONS; BIDDERS; BIDS; BIDDING strategies; BID price; ECONOMIC equilibrium
- Publication
Economic Theory, 2009, Vol 38, Issue 1, p105
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-007-0217-8