Auctions with asymmetric common-values: The first-price format

Abstract

We study the performance of the first-price format in auctions with asymmetric common-values. We show that, contrary to the result for second-price auctions, a small advantage for one player translates only to small changes in bidders' strategies, and the equilibrium remains close to the first-price equilibrium of the original game. We characterize the equilibrium bidding strategies and their behavior as the degree of asymmetry increases. Finally, we compare the revenues at the optimal auction, the first-price auction and the second-price auction.JEL classification: D44; D82; T96; G34

Research on Secondary Spectrum Trading Mechanisms Based on Technical and Market Changes

“…Consequently, the behaviour of each agent corresponds with its goals. There have been many studies of auction mechanisms [11,12]. Most related research focused on spectrum auction mechanisms in detail.…”