Equilibrium in the Two Player, K-Double Auction with Affiliated Private Values

32 Pages Posted: 12 Jun 2003

See all articles by Ohad Kadan

Ohad Kadan

Washington University in St. Louis - John M. Olin Business School

Date Written: March 2006

Abstract

We present sufficient conditions for the existence of an increasing equilibrium in the two player k-double auction with affiliated private values. In the case k ∈ {0, 1} there exists a unique equilibrium in non-dominated strategies. Applying this equilibrium, we provide a detailed example illustrating how dependence level affects strategic bidding. In the case k ∈ (0, 1) we prove existence of a continuum of strictly increasing equilibria, and illustrate them using an example. Furthermore, we show that equilibria in the case of independent private values are pointwise limits of equilibria with strictly affiliated private values.

Keywords: Double Auction, Affiliation, Single Crossing

JEL Classification: C72, D44

Suggested Citation

Kadan, Ohad, Equilibrium in the Two Player, K-Double Auction with Affiliated Private Values (March 2006). FEEM Fondazione Eni Enrico Mattei Research Paper Series, Forthcoming. Available at SSRN: https://ssrn.com/abstract=398421 or http://dx.doi.org/10.2139/ssrn.398421

Ohad Kadan (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

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