CFDP 2190R

On the Existence of Equilibrium in Bayesian Games Without Complementarities

Publication Date: August 2019

Revision Date: November 2019

Pages: 34

Abstract: 

This paper presents new results on the existence of pure-strategy Bayesian equilibria in specified functional forms. These results broaden the scope of methods developed by Reny (2011) well beyond monotone pure strategies. Applications include natural models of first-price and all-pay auctions not covered by previous existence results. To illustrate the scope of our results, we provide an analysis of three auctions: (i) a first-price auction of objects that are heterogeneous and imperfect substitutes; (ii) a first-price auction in which bidders’ payoffs have a very general interdependence structure; and (iii) an all-pay auction with non-monotone equilibrium.

Keywords: Bayesian games, Monotone strategies, Pure-strategy equilibrium, Auctions

JEL Classification Codes: C72, D44

JEL Classification Codes: C72D44