Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/118051
Authors: 
Vartiainen, Hannu
Year of Publication: 
2003
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 24.2003
Abstract: 
We study auction design when parties cannot commit themselves to the mechanism. The seller may change the rules of the game and the buyers choose their outside option at all stages. We assume that the seller has a leading role in equilibrium selection at any stage of the game. Stationary equilibria are characterized in the language of vonNeumann-Morgenstern stable sets. This simplifies the analysis remarkably. In the one buyer case, we obtain the Coase conjecture: the buyer obtains all the surplus and efficiency is reached. However, in the multiple buyer case the seller can achieve more: she is able to commit to the English auction. Typically the converse also holds, the English auction is the only stable auction mechanism.
Subjects: 
Auction theory
commitment
stable sets
JEL: 
C72
D44
D78
Document Type: 
Working Paper

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