Simultaneous Ascending Auctions with Complementarities and Known Budget Constraints Articles uri icon

authors

  • BRUSCO, SANDRO
  • LOPOMO, GIUSEPPE

publication date

  • January 2009

start page

  • 105

end page

  • 124

issue

  • 1

volume

  • 38

International Standard Serial Number (ISSN)

  • 0938-2259

Electronic International Standard Serial Number (EISSN)

  • 1432-0479

abstract

  • We study simultaneous ascending auctions of two identical objects when bidders are financially constrained and their valuations exhibit complementarities. We assume the budget constraints are known but the values for individual objects are private information, and characterize noncollusive equilibria. Equilibrium behavior is affected by the exposure problem. Bidders with higher budgets are more reluctant to bid, because opponents with lower budgets may end up pursuing a single object, thus preventing the realization of complementarities. Therefore poor bidders may win both objects when they do not have the highest valuation.