Ascending auctions for multiple objects: the case for the Japanese design

G. Albano, F. Germano, S. LOVO

Economic Theory

August 2006, vol. 28, n°2, pp.331-355

Departments: Finance, GREGHEC (CNRS)

We consider two ascending auctions for multiple objects, namely, an English and a Japanese auction, and derive a perfect Bayesian equilibrium of the Japanese auction by exploiting its strategic equivalence with the survival auction, which consists of a finite sequence of sealed-bid auctions. Thus an equilibrium of a continuous time game is derived by means of backward induction in finitely many steps. We then show that all equilibria of the Japanese auction induce equilibria of the English auction, but that many collusive or signaling equilibria of the English auction do not have a counterpart in the Japanese auction