Zheng, Charles Zhoucheng

WP #06038, November 2006 (Revised on June 4, 2008)

A model of English auction that allows jump bidding is proposed. When two objects are sold separately via such English auctions, I construct an equilibrium such that bidders signal via jump bids, thereby forming rational expectations of the prices without relying on any central mediator. This equilibrium eliminates the exposure problem for a bidder whose valuation function is superadditive. Consequently, the auction game overly concentrates the goods to a multi-item bidder and never overly diffuses them to single-item bidders.

JEL Classification: D44, D82

Keywords: complementarity, auction, multiple object aucrtions, simultaneous auctions, synergy, exposure problem, threshold problem

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