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A Note On K-Price Auctions With Complete Information When Mixed Strategies Are Allowed, Timothy Mathews, Jesse A. Schwartz

Faculty Articles

Restricting attention to players who use pure strategies, Tauman (2002) proves that in a k-price auction (k> 3) for every Nash equilibrium in which no player uses a weakly dominated strategy: (i) the bidder with the highest value wins the auction and (ii) pays a price higher than the second-highest value among the players, thereby generating more revenue for the seller than would occur in a first- or second-price auction. We show that these results do not necessarily hold when mixed strategies are allowed. In particular, we construct an equilibrium for k > 4 in which the second-highest valued …