Auctions of homogeneous goods: game-theoretic analysis

Alexander Vasin, Polina Kartunova

Lomonosov Moscow State University

Abstract: This paper discusses results on Nash equilibrium and its refinements for several variants of the architecture for oligopolistic markets of homogeneous goods. For different kinds of one-stage and two-stage auctions, we compare the game-theoretic solution with the competitive equilibrium and estimate the loss of social welfare due to producers’ market power. We conclude on the optimal architecture of the market.

Keywords: Game theory; auctions; market power; social welfare.

Language: English