DOI: 10.1257/mic.20250013 ISSN: 1945-7669

Symmetric Equilibrium in Pre-auction Investment

Daniel Quint, Fuhito Kojima
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We characterize the symmetric equilibria of a pre-auction game of investment in an internet ad auction environment. For a wide class of auction formats, we show a symmetric equilibrium exists for the pre-auction investment game, is essentially unique, and is the same for all auction formats in the class. We give sufficient conditions for the symmetric equilibrium to be in pure strategies and to achieve the efficient level of investment. Finally, we show comparative statics results with respect to a variety of parameters. (JEL D44, D82)

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