Simple Auctions

42 Pages Posted: 9 Apr 2013

See all articles by Olivier Compte

Olivier Compte

Paris School of Economics (PSE); Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS)

Andrew Postlewaite

University of Pennsylvania - Department of Economics

Date Written: April 8, 2013

Abstract

Standard Bayesian models assume agents know and fully exploit prior distributions over types. We are interested in modeling agents who lack detailed knowledge of prior distributions. In auctions, that agents know priors has two consequences: (i) signals about own valuation come with precise inference about signals received by others; (ii) noisier estimates translate into more weight put on priors. We revisit classic questions in auction theory, exploring environments in which no such complex inferences are precluded. This is done in a parsimonious model of auctions in which agents are restricted to using simple strategies.

Keywords: Auctions, Bayesian Problems

JEL Classification: D44

Suggested Citation

Compte, Olivier and Postlewaite, Andrew, Simple Auctions (April 8, 2013). PIER Working Paper No. 13-017, Available at SSRN: https://ssrn.com/abstract=2246922 or http://dx.doi.org/10.2139/ssrn.2246922

Olivier Compte

Paris School of Economics (PSE)

48 Boulevard Jourdan
Paris, 75014 75014
France

Ecole Nationale des Ponts et Chaussées (ENPC) - Centre d'Enseignement et de Recherche en Analyse Socio-Economique (CERAS) ( email )

28, rue des Saints-Peres
75007 Paris
France

Andrew Postlewaite (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7350 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.econ.upenn.edu/~apostlew

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