Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/43771
Authors: 
Louge, Fernando
Riedel, Frank
Year of Publication: 
2010
Series/Report no.: 
Working papers // Institute of Mathematical Economics 435
Abstract: 
This paper studies the evolutionary stability of the unique Nash equilibrium of a first price sealed bid auction. It is shown that the Nash equilibrium is not asymptotically stable under payoff monotonic dynamics for arbitrary initial popu- lations. In contrast, when the initial population includes a continuum of strategies around the equilibrium, the replicator dynamic does converge to the Nash equilibrium. Simulations are presented for the replicator and Brown-von Neumann-Nash dynamics. They suggest that the convergence for the replicator dynamic is slow compared to the Brown-von Neumann-Nash dynamics.
Subjects: 
Auction theory
Evolutionary stability
JEL: 
C73
D44
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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