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Title:Rationalizable outcomes of large independent private-value first-price discrete auctions PDF Logo
Authors:Dekel, Eddie
Wolinsky, Asher
Issue Date:2001
Series/Report no.:Discussion paper // Center for Mathematical Studies in Economics and Management Science 1321
Abstract:We consider discrete versions of first-price auctions. We present a condition on beliefs about players' values such that, with any fixed finite set of possible bids and sufficiently many players, only bidding the bid closest from below to one's true value survives iterative deletion of bids that are dominated, where the dominance is evaluated using beliefs that satisfy the condition. The condition holds in an asymmetric conditionally independent environment so long as the likelihood of each type is bounded from below. In particular, with many players, common knowledge of rationality and that all types are possible in an independent and private values auction implies that players will bid just below their true value.
Document Type:Working Paper
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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