Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174113
Authors: 
Silva, Ricardo Gonçalves
Ray, Indrajit
Year of Publication: 
2016
Series/Report no.: 
Cardiff Economics Working Papers E2016/13
Abstract: 
We consider the set-up of a Japanese-English auction with exogenously fixed discrete bid levels for the wallet game with two bidders. We prove that bidding twice the signal - the equilibrium strategy with continuous bid levels - is never an equilibrium in this set up. We show that partition equilibria exist that may be separating or pooling. We illustrate some separating and pooling equilibria with two and three discrete bid levels; we also compare the revenues of the seller from these equilibria and thereby find the optimal bid levels in these cases.
Subjects: 
Japanese-English auctions
wallet game
discrete bids
partitions
pooling equilibrium
separating equilibrium
JEL: 
C72
D44
Document Type: 
Working Paper
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