Journal article
On Nondegenerate Equilibria Of Double Auctions With Several Buyers And A Price Floor
Year:
2021Published in:
Economic TheoryDouble auction
Nondegenerate equilibrium
Generalized convexity
Payoff security
Local intersection property
This paper investigates the existence of a nondegenerate pure-strategy Bayesian-Nash equilibrium in a double auction between one seller and several heterogeneous buyers in the independent private value framework. It begins with three examples describing some of the model’s particular features. After studying a number of continuity-related properties of the interim payoff functions, we construct a sequence of strategy profiles that converges to a nondegenerate monotone Bayesian-Nash equilibrium of the game under some strict monotonicity conditions. The equilibrium existence result is applied to a double auction with risk-averse bidders.