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Finance and Economics Discussion Series
The Finance and Economics Discussion Series logo links to FEDS home page Computationally Convenient Distributional Assumptions for Common Value Auctions
Michael B. Gordy

Abstract: Although the mathematical foundations of common value auctions have been well understood since Milgrom & Weber (1982), equilibrium bidding strategies are computationally complex. Very few calculated examples can be found in the literature, and only for highly specialized cases. This paper introduces two sets of distributional assumptions that are flexible enough for theoretical and empirical applications and yet permit straightforward calculation of equilibrium bidding strategies.

Keywords: Common value auctions

Full paper (229 KB PDF) | Full paper (229 KB Postscript)

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Last update: July 16, 1997