Malice in auctions and commitments to cancel
Brishti Guha ()
Additional contact information
Brishti Guha: Jawaharlal Nehru University
Economics Bulletin, 2018, vol. 38, issue 3, 1623-1631
Abstract:
A bidder is “malicious†if his valuation includes, apart from his intrinsic valuation for the object, a malice component from depriving other bidders. A bidder has malice even if the auction is cancelled as this prevents the other bidder from getting the object. I consider a second price sealed bid auction of a single object with two potentially malicious bidders. Valuations, including malice components, are private knowledge. Suppose the seller commits to cancel the auction if either bidder drops out. Then, while bidders with standard preferences never drop out, malicious bidders do so over a non-empty parameter range, and the auction is cancelled despite the absence of any entry fees or reserve prices. This could also be true of spiteful bidders. However, if valuations are common knowledge, the bidder with the higher intrinsic valuation never drops out in an auction with two spiteful bidders (given the seller's commitment to cancel if he does): however, in an auction with two malicious bidders, both might drop out. Experimenters might thus be able to distinguish between (i) standard bidders versus malicious or spiteful ones, and (ii) spiteful versus malicious bidders. For specific distribution functions, the tendency to drop out is increasing in the bidder's malice.
Keywords: Malice; auctions. (search for similar items in EconPapers)
JEL-codes: D1 D4 (search for similar items in EconPapers)
Date: 2018-09-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I3-P153.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-18-00063
Access Statistics for this article
More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().