The private value single item bisection auction

Elena Grigorieva*, P.J.J. Herings, Rudolf Mueller, Dries Vermeulen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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Abstract

In this paper we present a new iterative auction, the bisection auction, that can be used for the sale of a single indivisible object. The bisection auction has fewer rounds than the classical English auction and causes less information to be revealed than the Vickrey auction. Still, it preserves all characteristics the English auction shares with the Vickrey auction: there exists an equilibrium in weakly dominant strategies in which everyone behaves truthfully, the object is allocated in accordance with efficiency requirements to the buyer who has the highest valuation, and the price paid by the winner of the object equals the second-highest valuation

Original languageEnglish
Pages (from-to)107-118
Number of pages12
JournalEconomic Theory
Volume30
Issue number1
DOIs
Publication statusPublished - Jan 2007
Externally publishedYes

Keywords

  • single item auction
  • weakly dominant strategy
  • extensive form games of incomplete information
  • information revelation
  • binary search

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