February 1997

Computationally Convenient Distributional Assumptions for Common Value Auctions

Michael B. Gordy


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.

Full paper (229 KB Postscript)

Keywords: Common value auctions

PDF: Full Paper

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