Working Paper: CEPR ID: DP17936
Authors: David K. Levine; Andrea Mattozzi; Salvatore Modica
Abstract: We formally study two bidder first price, second price, and all-pay auctions with known values, deriving the equilibrium payoffs and strategies and showing when all three yield the same equilibrium payoffs to the bidders. This latter result, the tripartite auction theorem, does not hold for all auctions, in particular it can fail for symmetric auctions with high stakes and in auctions with very low stakes.
Keywords: first price auctions; allpay auctions
JEL Codes: D44
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| auction type (D44) | bidder utility (D44) |
| equilibrium utility in a second price auction (D44) | second price auction utility (D44) |
| equilibrium utility in a first price auction (D44) | second price auction utility (D44) |
| equilibrium utility in an all-pay auction (D44) | second price auction utility (D44) |
| bidding costs structure (D44) | auction outcomes (D44) |
| binding caps (Y20) | utility equivalence (D11) |
| symmetric auctions with high stakes (D44) | utility equivalence (D11) |
| asymmetric costs (D43) | utility equivalence (D11) |