Immediate Demand Reduction in Simultaneous Ascending Bid Auctions (new title: Immediate demand reduction in simultaneous ascending-bid auctions: a uniqueness result)
CESifo, Munich, 2004
CESifo Working Paper No. 1315
The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one unit to every player and if bid increments are sufficiently small. In that unique equilibrium, bidders immediately reduce their demand to the efficient allocation, and the auction ends in the first round of bidding.