Scoring Auctions with Coarse Beliefs
Fuente:
arXiv
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| Formato: | Preprint |
| Publicado: |
2024
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| _version_ | 1866913538117730304 |
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| author | Feffer, Joseph |
| author_facet | Feffer, Joseph |
| contents | This paper studies a simplicity notion in a mechanism design setting in which agents do not necessarily share a common prior. I develop a model in which agents participate in a prior-free game of (coarse) information acquisition followed by an auction. After acquiring information, the agents have uncertainty about the environment in which they play and about their opponents' higher-order beliefs. A mechanism admits a coarse beliefs equilibrium if agents can play best responses even with this uncertainty. Focusing on multidimensional scoring auctions, I fully characterize a property that allows an auction format to admit coarse beliefs equilibria. The main result classifies auctions into two sets: those in which agents learn relatively little about their setting versus those in which they must fully learn a type distribution to form equilibrium strategies. I then find a simple, primitive condition on the auction's rules to distinguish between these two classes. I then use the condition to categorize real-world scoring auctions by their strategic simplicity. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2410_06150 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Scoring Auctions with Coarse Beliefs Feffer, Joseph Theoretical Economics This paper studies a simplicity notion in a mechanism design setting in which agents do not necessarily share a common prior. I develop a model in which agents participate in a prior-free game of (coarse) information acquisition followed by an auction. After acquiring information, the agents have uncertainty about the environment in which they play and about their opponents' higher-order beliefs. A mechanism admits a coarse beliefs equilibrium if agents can play best responses even with this uncertainty. Focusing on multidimensional scoring auctions, I fully characterize a property that allows an auction format to admit coarse beliefs equilibria. The main result classifies auctions into two sets: those in which agents learn relatively little about their setting versus those in which they must fully learn a type distribution to form equilibrium strategies. I then find a simple, primitive condition on the auction's rules to distinguish between these two classes. I then use the condition to categorize real-world scoring auctions by their strategic simplicity. |
| title | Scoring Auctions with Coarse Beliefs |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2410.06150 |