Simultaneous auctions for complementary goods

TL;DR

This paper analyzes a model of simultaneous first-price auctions for complementary goods, demonstrating the existence of a monotone pure-strategy Bayesian Nash Equilibrium in a simplified two-bidder, two-good setting.

Contribution

It introduces a formal model for simultaneous auctions of complementary goods and proves the existence of equilibrium strategies within this framework.

Findings

Existence of a monotone pure-strategy Bayesian Nash Equilibrium.

Model incorporates private values and complementarity explicitly.

Framework applicable to multi-good auction environments.

Abstract

This paper studies an environment of simultaneous, separate, first-price auctions for complementary goods. Agents observe private values of each good before making bids, and the complementarity between goods is explicitly incorporated in their utility. For simplicity, a model is presented with two first-price auctions and two bidders. We show that a monotone pure-strategy Bayesian Nash Equilibrium exists in the environment.