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On the equivalence between descending bid auctions and first price sealed bid auctions

✍ Scribed by Edi Karni

Publisher
Springer US
Year
1988
Tongue
English
Weight
308 KB
Volume
25
Category
Article
ISSN
0040-5833

No coin nor oath required. For personal study only.

✦ Synopsis

Bidding the same price in descending bid auctions and in first price sealed bid auctions is equivalent to expected utility maximizing behavior, and this is equivalent to dynamically consistent bidding. The claim that, in strategic form, descending bid and first price sealed bid auctions are the same game is thus shown to be false, since the mapping from strategies to payoffs is not the same for the two auction forms.

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