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Auctions with Unique Equilibria

By et al. Shuchi Chawla

Abstract

We study Bayes-Nash equilibria in a large class of anonymous order-based auctions. These include the generalized first-price auction for allocating positions to bidders, e.g., for sponsored search. We show that when bidders ’ values are independent and identically distributed there is a unique Bayes Nash equilibrium; This equilibrium is symmetric and efficient. Importantly, our proof is simple and structurally revealing. This uniqueness result for the generalized first-price auction is in stark contrast to the generalized second-price auction where there may be no efficient equilibrium. This result suggests, e.g., that first-price payment semantics may have advantages over second-price payment semantics. Our results extend also to certain models of risk aversion

Topics: Categories and Subject Descriptors, J.4 [Social and Behavioral Sciences, Economics General Terms, Algorithms, Economics, Theory Additional Key Words and Phrases, Bayes-Nash equilibrium, first-price auction, all-pay auction, GFP, GSP, price
Year: 2013
OAI identifier: oai:CiteSeerX.psu:10.1.1.359.7921
Provided by: CiteSeerX
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