Scoring Auctions with Coarse Beliefs
Joseph Feffer

TL;DR
This paper introduces a framework for analyzing scoring auctions where agents have coarse, uncertain beliefs, providing a full classification of auction types based on their strategic complexity and information requirements.
Contribution
It develops a model of prior-free, coarse belief equilibria in scoring auctions and characterizes the conditions under which auctions are strategically simple or complex.
Findings
Classifies auctions into two categories based on information learning requirements.
Provides a primitive condition to distinguish between simple and complex scoring auctions.
Categorizes real-world scoring auctions by their strategic simplicity.
Abstract
This paper studies a simplicity notion in a mechanism design setting in which agents do not necessarily share a common prior. I develop a model in which agents participate in a prior-free game of (coarse) information acquisition followed by an auction. After acquiring information, the agents have uncertainty about the environment in which they play and about their opponents' higher-order beliefs. A mechanism admits a coarse beliefs equilibrium if agents can play best responses even with this uncertainty. Focusing on multidimensional scoring auctions, I fully characterize a property that allows an auction format to admit coarse beliefs equilibria. The main result classifies auctions into two sets: those in which agents learn relatively little about their setting versus those in which they must fully learn a type distribution to form equilibrium strategies. I then find a simple, primitive…
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Taxonomy
TopicsAuction Theory and Applications · Consumer Market Behavior and Pricing · Game Theory and Voting Systems
