DOMINANCE OR MAXIMIN - HOW TO SOLVE AN ENGLISH AUCTION

It is widely believed that the English auction is solved after the dom inated strategies are eliminated. This paper demonstrates that the dom inance criterion is not very effective in many English auction models. To bid more than the true willingness to pay is dominated but a stron ger solution concept is needed to deduce that the buyers increase the price in small steps up to their valuation. An iterated application of the dominance criterion does not solve the problem, but if it is assu med that the buyers use their maximin strategies the usual argument ho lds.