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Existence of Equilibrium in Auctions and Discontinuous Bayesian Games: Endogenous and Incentive Compatible Sharing Rules

Jackson, Matthew O. and Swinkels, Jeroen M. (1999) Existence of Equilibrium in Auctions and Discontinuous Bayesian Games: Endogenous and Incentive Compatible Sharing Rules. Social Science Working Paper, 1075. California Institute of Technology , Pasadena, CA. (Unpublished)

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We consider discontinuous games with incomplete information. Auctions are a leading example. With standard tie breaking rules (or more generally, sharing rules), these games may not have equilibria. We consider sharing rules that depend on the private information of players. We show that there exists an equilibrium of an augmented game with an incentive compatible sharing rule in which players reveal their private information for the purpose of determining sharing. We also show that for a large class of private value auctions, ties never occur in the equilibrium of the augmented game. This establishes existence of equilibria in such auctions with standard tie breaking rules.

Item Type:Report or Paper (Working Paper)
Jackson, Matthew O.0000-0001-9846-4249
Additional Information:Revised version. Original dated to August 1999. Independent work by Simon and Zame establishes results similar to some of those in this paper. We became aware of the overlap in our work in October 1999. We thank Leo Simon and Bill Zame for helpful conversations concerning existence in auctions in October 1997. We also thank Kim Border, Martin Cripps, John Nachbar, Larry Samuelson, Mark Satterthwaite, and Tianxiang Ye for helpful comments and suggestions.
Group:Social Science Working Papers
Subject Keywords:Bayesian Games, Existence, Equilibrium, Endogenous Sharing, Tie Breaking, Auctions
Series Name:Social Science Working Paper
Issue or Number:1075
Classification Code:JEL: C62,C63,D44,D82
Record Number:CaltechAUTHORS:20170808-170732405
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79993
Deposited By: Jacquelyn Bussone
Deposited On:09 Aug 2017 16:26
Last Modified:03 Oct 2019 18:26

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