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on Game Theory |
| By: | Paul Schweinzer (Department of Economics, University of Bonn Lennéstraße 37, 53113 Bonn, Germany Paul.Schweinzer@uni-bonn.de) |
| Abstract: | We study the alternating-offers bargaining problem of assigning an indivisible and commonly valued object to one of two players in return for some payment among players. The players are asymmetrically informed about the object’s value and have veto power over any settlement. There is no depreciation during the bargaining process which involves signalling of private information. We characterise the perfect Bayesian equilibrium of this game which is essentially unique if offers are required to be strictly increasing. Equilibrium agreement is reached gradually and nondeterministically. The better informed player obtains a rent. |
| Keywords: | Sequential bargaining, Common values, Incomplete information, Repeated games |
| JEL: | C73 C78 D44 D82 J12 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:137&r=gth |
| By: | Paul Schweinzer (Department of Economics, University of Bonn, Lenn´estraße 37, 53113 Bonn, Germany Paul.Schweinzer@uni-bonn.de) |
| Abstract: | We study the alternating-offer bargaining problem of sharing a common value pie under incomplete information on both sides and no depreciation between two identical players. We characterise the essentially unique perfect Bayesian equilibrium of this game which turns out to be in gradually increasing offers. |
| Keywords: | Gradual bargaining, Common values, Incomplete information, Repeated games |
| JEL: | C73 C78 D44 D82 J12 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:136&r=gth |
| By: | Philippe Jehiel (Paris-Jourdan Sciences Economiques, and University College, London, jehiel@enpc.fr); Moritz Meyer-ter-Vehn (moritz_mtv@web.de); Benny Moldovanu (Department of Economics, University of Bonn, Lennestr. 37, 53113 Bonn, Germany; mold@uni-bonn.de) |
| Abstract: | We study multi-object auctions where agents have private and additive valuations for heterogeneous objects. We focus on the revenue properties of a class of dominant strategy mechanisms where a weight is assigned to each partition of objects. The weights influence the probability with which partitions are chosen in the mechanism. This class contains efficient auctions, pure bundling auctions, mixed bundling auctions, auctions with reserve prices and auctions with pre-packaged bundles. For any number of objects and bidders, both the pure bundling auction and separate, efficient auctions for the single objects are revenue-inferior to an auction that involves mixed bundling. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:141&r=gth |
| By: | Philippe Jehiel (Paris-Jourdan Sciences Economiques, and University College, London, jehiel@enpc.fr); Benny Moldovanu (Department of Economics, University of Bonn, Lennestr. 37, 53113 Bonn, Germany; mold@uni-bonn.de) |
| Abstract: | We study the effects of allocative and informational externalities in (multi-object) auctions and related mechanisms. Such externalities naturally arise in models that embed auctions in larger economic contexts. In particular, they appear when there is downstream interaction among bidders after the auction has closed. The endogeneity of valuations is the main driving force behind many new, specific phenomena with allocative externalities: even in complete information settings, traditional auction formats need not be efficient, and they may give rise to multiple equilibria and strategic non-participation. But, in the absence of informational externalities, welfare maximization can be achieved by Vickrey-Clarke- Groves mechanisms. Welfare-maximizing Bayes-Nash implementation is, however, impossible in multi-object settings with informational externalities, unless the allocation problem is separable across objects (e.g. there are no allocative externalities nor complementarities) or signals are one-dimensional. Moreover, implementation of any choice function via ex-post equilibrium is generically impossible with informational externalities and multidimensional types. A theory of information constraints with multidimensional signals is rather complex, but indispensable for our study. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:142&r=gth |