Strategic Behavior in Ascending-Price Multiple-Object Auctions

Abstract

In this paper we examine an ascending-price multiple-object auction that has been used in the brazilian privatization process. We assume that artificially intelligent agents replace bidders in the game. We incorporate the existence of small players who cannot play strategically. Our results suggest that strategic bidders learn how to play in few rounds. We also conclude that as the number of players behaving sttategically decreases the solution approaches the competitive one. Thus, any predictions related to the results of the auctions must be conditional on the market structure.