Discussion paper

DP17936 The Tripartite Auction Folk Theorem

We formally study two bidder first price, second price, and all-pay auctions with known values, deriving the equilibrium payoffs and strategies and showing when all three yield the same equilibrium payoffs to the bidders. This latter result, the tripartite auction theorem, does not hold for all auctions, in particular it can fail for symmetric auctions with high stakes and in auctions with very low stakes.

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Citation

Levine, D, A Mattozzi and S Modica (2023), ‘DP17936 The Tripartite Auction Folk Theorem‘, CEPR Discussion Paper No. 17936. CEPR Press, Paris & London. https://cepr.org/publications/dp17936