Existence and convergence of equilibria in the buyer’s bid double auction1

Steven R. Williams1

Research output: Contribution to journalArticlepeer-review

Abstract

This paper concerns a Bayesian game model of the Buyer’s Bid Double Auction, which is a procedure for organizing trade that selects a market-clearing price from a list of offers/bids. Strategic misrepresentation by traders may make the outcome of trade inefficient. Satterthwaite and Williams (1989) showed that misrepresentation and inefficiency quickly converge to zero as the number of traders on each side of the market increases. This is extended here to cases in which the number of buyers may differ from the number of sellers. The existence of equilibria in a generic instance of the model is also proven.

Original languageEnglish (US)
Pages (from-to)351-374
Number of pages24
JournalReview of Economic Studies
Volume58
Issue number2
DOIs
StatePublished - Apr 1991

ASJC Scopus subject areas

  • Economics and Econometrics

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