Merle Praum

 School of Business and Economics | Bachelor Econometrics and Operations Research

"Asymmetric Auctions: Understanding Valuation
Heterogeneity and Equilibrium Dynamics"

Merle's elevator pitch
"Auctions have been established as market mechanisms for allocating goods and resources, offering valuable insights into price expectation. This paper studies the existence of Bayesian Nash Equilibria (BNEs) in first-price sealed-bid asymmetric auctions in the context of bidder asymmetry and private information. It uses an ordinary differential equation framework to show that BNEs do not exist for a broad category of bidders under the assumption of a unique solution. Additionally, the study reveals that asymmetric auctions cannot have symmetric or linear BNE strategies. The paper provides further insights into the characterisation of BNEs if they exist."