Comparative Analysis for the Equilibrium Bidding Strategies of the Standard Auction Based on the Revenue Equivalence Principle

Full Text (PDF, 306KB), PP.67-73

Views: 0 Downloads: 0


Lei Wang 1,2,*

1. Institute of System Engineering, University of Wuhan, Wuhan, Hubei Province, China

2. School of Economics, University of Guizhou, Guiyang, Guizhou Province, China

* Corresponding author.


Received: 28 Apr. 2012 / Revised: 20 Jun. 2012 / Accepted: 25 Jul. 2012 / Published: 29 Aug. 2012

Index Terms

Revenue equivalence principle, standard auction, equilibrium bidding strategy, incentive compatibility


It has analyzed the transition processes for the content of the revenue equivalence principle. It used the revenue equivalence principle to derive the equilibrium bidding strategies in the first, second and third price auction and the all-pay auction from the expected payment of the bidders. Based on this, it compared the equilibrium bidding strategies in the four auction forms and got some useful conclusions.

Cite This Paper

Lei Wang,"Comparative Analysis for the Equilibrium Bidding Strategies of the Standard Auction Based on the Revenue Equivalence Principle", IJEM, vol.2, no.4, pp.67-73, 2012. DOI: 10.5815/ijem.2012.04.09 


[1]William Vickrey,“Counterspeculation,Auction,and Competitive,”Journal of Finance, vol. 16, no.1, pp. 8-37, March 1961.
[2]Roger B.Myerson,“Optimal Auction Design,”Mathematics of Operations Research, vol. 6, no.1, pp. 8-37, February 1981.
[3]Milgrom Paul,“Auction and Bidding,” Journal of economic perspectionves, vol. 25, no.2, pp. 8-37, June 1987.
[4]Paul Klemperer, “Auction theory:A guide to the literature,” Journal of economic surveys, vol. 13, no.3, pp. 227-286, June 1999.
[5]Vijay Krishna, Auction Theory, 1rd ed., Academic Press, 2002, pp.29-80..
[6]Erwin Amann ,Wolfgang Leininger,“Asymmetric All-Pay Auction with incomplete information:The Two-Player Case”,Games and economic behavior. vol. 14, no.1, pp. 1-18, May 1996.
[7]Gadi Fibich,Arieh Gavious.“Revenue equivalence in asymmetric auctions”,Journal of ecomomic theory. vol. 115, no.2, pp. 309-321, April 2004.
[8]J.Atsu Amegashie.“An all-pay auction with a pure-strategy equilibrium”,Ecomomics Letters. vol.70, no.1, pp. 79-82, January 2001.