Core-stable Rings in Second Price Auctions with Common Values

In a common value auction in which the information partitions of the bidders are connected, all rings are core-stable. More precisely, the ex ante expected utilities of rings, at the (noncooperative) sophisticated equilibrium proposed by Einy, Haimanko, Orzach and Sela (Journal of Mathematical Economics, 2002), describe a cooperative game, in characteristic function form, in spite of the underlying strategic externalities. A ring is core-stable if the core of this characteristic function is not empty. Furthermore, every ring can implement its sophisticated equilibrium strategy by means of an incentive compatible mechanism.


Issue Date:
2010-11
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/96668
Total Pages:
26
JEL Codes:
C71; C72; D44
Series Statement:
SD
119.2010




 Record created 2017-04-01, last modified 2017-08-25

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