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Strategic Leaks in First-Price Auctions and Tacit Collusion: The Case of Spying and Counter-Spying

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2021

We analyze strategic leaks due to spying out a rival’s bid in a first-price auction. Such leaks induce sequential bidding, complicated by the fact that the spy may be a counterspy who serves the interests of the spied at bidder and reports strategically distorted information. This ambiguity...

Persistent link: https://www.econbiz.de/10012582084

Induced Price Leadership and (Counter-)Spying Rivals' Play under Incomplete Information

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2019

We analyze spying out a rival’s price in a Bertrand market game with incomplete information. Spying transforms a simultaneous into a robust sequential moves game. We provide conditions for profitable espionage. The spied at firm may attempt to immunize against spying by delaying its pricing...

Persistent link: https://www.econbiz.de/10012018167

Auctions with Imperfect Commitment when the Reserve May Serve as a Signal

Jun, Byoung Heon; Wolfstetter, Elmar G. - 2014

If bidders are uncertain whether the auctioneer sticks to the announced reserve, some bidders respond by strategic non-participation, speculating that the auctioneer may revoke the reserve. However, the reserve inadvertently signals the auctioneer's type, which drives a unique separating and a...

Persistent link: https://www.econbiz.de/10010333455

Auctioning Process Innovations when Losers' Bids Determine Royalty Rates

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2009

We consider a licensing mechanism for process innovations that combines a license auction with royalty contracts to those who lose the auction. Firms' bids are dual signals of their cost reductions: the winning bid signals the own cost reduction to rival oligopolists, whereas the losing bid...

Persistent link: https://www.econbiz.de/10010333873

Auctions with imperfect commitment when the reserve may signal the auctioneer's type

Jun, Byoung Heon; Wolfstetter, Elmar G. - 2013

If bidders are uncertain whether the auctioneer sticks to the announced reserve, some bidders respond by not bidding, speculating that the auctioneer may revoke the reserve. However, the reserve inadvertently signals the auctioneer's type, which drives a unique separating and a multitude of...

Persistent link: https://www.econbiz.de/10010333881

Security bid auctions for agency contracts

Jun, Byoung Heon; Wolfstetter, Elmar G. - 2012

A principal uses security bid auctions to award an incentive contract to one among several agents, in the presence of … auctions, although it cannot extract the entire surplus implement efficient effort. Hence, profit sharing emerges without risk …

Persistent link: https://www.econbiz.de/10010334010

Licensing a common value innovation when signaling strength may backfire

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2010

of combining auctions and royalty contracts for losers. …

Persistent link: https://www.econbiz.de/10010334125

Optimal bid disclosure in license auctions with downstream interaction

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2014

The literature on license auctions for process innovations in oligopoly assumed that the auctioneer reveals the winning …, partial, and no disclosure of bids, which correspond to standard auctions. We show that more information disclosure increases …

Persistent link: https://www.econbiz.de/10010427157

Licensing innovations: The case of the inside patent holder

Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G. - 2015

The present paper reconsiders the inside innovators' licensing problem under incomplete information. Employing an optimal mechanism design approach, we show that, contrary to what is claimed in the literature, the optimal mechanism may prescribe fixed fees, royalty rates lower than the cost...

Persistent link: https://www.econbiz.de/10011350826

Security Bid Auctions for Agency Contracts

Jun, Byoung Heon; Wolfstetter, Elmar G. - 2013

A principal uses security bid auctions to award an incentive contract to one among several agents in the presence of … call a fixed wage contract, tends to outperform all other auctions, although it is not an optimal mechanism. However, by … adding output targets to hybrid share auctions one can (arbitrary closely) implement the optimal mechanism. …

Persistent link: https://www.econbiz.de/10010328749