FPA145 - First Price Auction Ichiro Obara UCLA Obara(UCLA...

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Unformatted text preview: First Price Auction Ichiro Obara UCLA February 15, 2010 Obara (UCLA) First Price Auction February 15, 2010 1 / 14 First Price Auction First Price Auction Obara (UCLA) First Price Auction February 15, 2010 2 / 14 First Price Auction First Price Auction First Price Auction The bidders submit their bid in a sealed envelope. The highest bidder wins, gets the good, and pays his or her own bid. Obara (UCLA) First Price Auction February 15, 2010 3 / 14 First Price Auction Dutch Auction There is another auction format called Dutch auction , which is equivalent to first price auction. Start with a very high price. The price goes down continuously in front of the bidders until some bidder decides to buy. Dutch price auction is strategically equivalent to first price auction. Obara (UCLA) First Price Auction February 15, 2010 4 / 14 Bayesian Nash Equilibrium Bayesian Nash Equilibrium Obara (UCLA) First Price Auction February 15, 2010 5 / 14 Bayesian Nash Equilibrium Uniform Distribubtion Uniform Distribution Clearly it is not a dominant strategy to bid one’s true value in FPA. In fact there is no DSE. We employ a version of Nash equilibrium to analyse this problem....
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This note was uploaded on 04/25/2010 for the course ECON 145 taught by Professor Obara during the Winter '10 term at UCLA.

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FPA145 - First Price Auction Ichiro Obara UCLA Obara(UCLA...

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