Title: Dominance or Maximin: How to Solve an English Auction
Abstract: It is widely believed that the English auction is solved after the dominated strategies are eliminated. This opinion is formally confirmed only for one "ascending clock" auction and can not be generalized for most other English auctions. In this paper I show that the formal argument which is usually given in this context can not be derived from the dominance criterion alone, but that it can be used to prove that competitive bidding is the unique maximin strategy of a bidder who believes that his opponents do not play dominated strategies. Since the competitive bids also form a Nash equilibrium this result gives an unfamiliar but strong support for the established solution.
Keywords: auction theory, dominance solvability, maximin criterion
Creation-Date: October 1993
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