Equilibrium in Sealed High Bid Auctions
Posted: 26 Jul 2001
There is a voluminous theoretical literature on sealed high-bid auctions (auctions in which bids are sealed and the high bidder pays his bid). See for example, Vickery (1961), Myerson (1981), riley and Samuelson (1981), Milgrom and Weber (1982), Mathews (1983), Maskin and Riley (1984), Holt(1980) Cox, Smith and Walker (1988). A critical property on which this literature relies is the existence of equilibrium in which buyers? bidding strategies are monotonic in their types. This enables the analyst to perform comparative statics as the distribution of types changes, and to compare the welfare properties of the high-bid auction with those of other auction institutions.
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