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Core-stable Rings in Second Price Auctions with Common Values

Working paper
Author/s: 
Françoise Forges and Ram Orzach
Issue number: 
2010.119
Publisher: 
FEEM
Year: 
2010
PDF [1]
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.
Tags: 
Cooperative Game Theory [2]

Source URL:http://coalitiontheory.net/content/core-stable-rings-second-price-auctions-common-values

Links
[1] http://www.feem.it/userfiles/attach/20109221341104NDL2010-119.pdf [2] http://coalitiontheory.net/research-areas/cooperative-game-theory