Ilia Tsetlin, Aleksandar Saša Pekeč
In a classical result, Milgrom (1981a) established that the Monotone Likelihood Ratio Property (MLRP) is a sufficient condition for the existence of an increasing symmetric equilibrium in (k+1)-st price common value auctions. We show: (1) If MLRP is violated, then for any number of bidders and objects there exists a distribution of the common value such that no increasing symmetric equilibrium exists; (2) If MLRP is violated, then for any distribution of the common value there exist infinitely many pairs of the number of bidders and the number of objects such that an increasing symmetric equilibrium does not exist; (3) There are examples where an increasing symmetric equilibrium exists even when the signal distribution violates MLRP.
INSEAD, 138676 Singapore, 1 Ayer Rajah Avenue, Singapore; Fuqua School of Business, Duke University, Durham, NC 27708-0120, United States
