Signal-Jamming in a Sequential Auction
University of Bonn - The Bonn Graduate School of Economics
Thomas D. Jeitschko
Michigan State University - Department of Economics
Humboldt University of Berlin - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Korea University - College of Economics and Commerce; World Bank
April 7, 2009
In a recurring auction early bids may reveal bidders' types, which in turn affects bidding in later auctions. Bidders take this into account and may bid in a way that conceals their private information until the last auction is played. The present paper analyzes the equilibrium of a sequence of first-price auctions assuming bidders have stable private values. We show that signal-jamming occurs and explore the dynamics of equilibrium prices.
Number of Pages in PDF File: 7
Keywords: Auctions, Signaling, Price Competition
JEL Classification: D44, D02, D43working papers series
Date posted: September 9, 2009 ; Last revised: June 21, 2012
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