1,721,020 research outputs found
A Bound of the Proportion of Pure Strategy Equilibria in Generic Games
No full textIn a generic finite normal form game with 2(alpha) + 1 Nash equilibria, at least alpha of the equilibria are nondegenerate mixed strategy equilibria (that is, they involve randomization by some players).Normal form, mixed strategy, game theory
Overdemand and underdemand in economies with indivisible goods and unit demand
No full textWe study an economy where a collection of indivisible goods are sold to a set of buyers who want to buy at most one good. We characterize the set of Walrasian equilibrium price vectors in such an economy using sets of overdemanded and underdemanded goods. Further, we give characterizations for the minimum and the maximum Walrasian equilibrium price vectors of this economy. Using our characterizations, we give a suncient set of rules that generates a broad class of ascending and descending auctions in which truthful bidding is an ex post Nash equilibrium.
Putting auction theory to work : the simultaneous ascending auction
No full textThe"simultaneous ascending auction"was first introduced in 1994 to sell licenses to use bands of radio spectrum in the United States. Much of the attention devoted to the auction came from its role in reducing federal regulation of the radio spectrum and allowing market values, rather than administrative fiat, to determine who would use the spectrum resource. Several parts of economic theory proved helpful in designing the rules for simultaneous ascending auction and in thinking about how the design might be improved and adapted for new applications. After briefly reviewing the major rules of the auction in section 2, the author turns in section 3 to an analysis based on tatonnement theory, which regards the auction as a mechanism for discovering an efficient allocation and its supporting prices. The analysis reveals a fundamental difference between situations in which the licenses are mutual substitutes and others in which the same licenses are sometimes substitutes and sometimes complements. Section 4 is a selective account of some applications of game theory to evaluating the simultaneous ascending auction design for spectrum sales. Results like those reported in section 3 have led to renewed interest in auctions in which bids for license packages are permitted. In section 5, the author uses game theory to analyze the biases in a leading proposal for dynamic combinatorial bidding. Section 6 briefly answers two additional questions that economists often ask about auction design: If trading of licenses after the auction is allowed, why does the auction form matter at all for promoting efficient license assignments? Holding fixed the quantity of licenses to be sold, how sharp is the conflict between the objectives of assigning licenses efficiently and obtaining maximum revenue? Section 7 concludes.Economic Theory&Research,International Terrorism&Counterterrorism,Markets and Market Access,Environmental Economics&Policies,Labor Policies,Markets and Market Access,Access to Markets,Economic Theory&Research,Environmental Economics&Policies,International Terrorism&Counterterrorism
On Ascending Vickrey Auctions for Heterogeneous Objects
No full textVickrey auctions, multi-item auctions, combinatorial auctions,
A New Auction for Substitutes: Central-Bank Liquidity Auctions, “Toxic Asset” Auctions, and Variable Product-Mix Auctions
No full textI describe a new static (sealed-bid) auction for multiple substitute goods. As in a two-sided simultaneous multiple round auction (SMRA), bidders bid on multiple assets simultaneously, and bid-takers choose supply functions across assets. The auction yields more efficiency, revenue, information, and trade than running multiple separate auctions, but is often simpler to use and understand, and less vulnerable to collusion, than a SMRA. I designed it after the 2007 Northern Rock bank run to help the Bank of England fight the credit crunch; in 2008 the U.S. Treasury planned (but later cancelled) using a related design to buy “toxic assets”.multi-object auction, TARP, central banking, simultaneous ascending auction, treasury auction, term auction, toxic assets.
Optimal operational monetary policy rules in an endogenous growth model: a calibrated analysis
No full textWe construct an endogenous growth model with new Keynesian-type sticky prices and wages. In this model, monetary policy affects long-run output growth. We characterize the optimal operational monetary policy rule in this economy. We find that even though stabilization of output growth increases long-run output growth, the optimal monetary policy rule is the rule that makes interest rate respond to price and wage actively and output growth mutely, similar as in exogenous growth models. We also find that the optimal monetary policy rule virtually maximizes mean growth. These results suggest that although long-run growth is important for welfare, new Keynesian's claim that monetary policy should stabilize nominal variables is highly robust.Monetary policy; Sticky price and wage; Business cycle fluctuations; Productivity growth
The Product-Mix Auction: A New Auction Design for Differentiated Goods
No full textKlemperer describes a new static (sealed-bid) auction for differentiated goods—the “Product-Mix Auction”. Bidders bid on multiple assets simultaneously, and bidtakers choose supply functions across assets. The auction yields greater efficiency, revenue, information, and trade than running multiple separate auctions. It is also often simpler to use and understand, and less vulnerable to collusion, than a simultaneous multiple round auction. Klemperer designed it after the 2007 Northern Rock bank-run to help the Bank of England fight the credit crunch; in 2008 the U.S. Treasury planned using a related design to buy “toxic assets”; it may be used to purchase electricity.
Optimal complementary auctions
No full textThis paper considers the situation where two products are sold by the same seller, but to disjoint sets of potential buyers. Externalities may arise from each market outcome to the other. The paper examines the nature of the seller's optimal mechanism, and, for example in the case of positive externalities, it is shown that the allocation decision in either market depends on the highest types in both markets. The optimal mechanism can be implemented by an indirect mechanism that essentially charges winning bidders for the value of their externalities. The analysis is applied to the sale of public sector franchises including exploration and development rights for oil and gas tracts
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