Comparative Statics in First Price Auctions

Abstract Two bidders take part in a first price auction. We show that if a bidder's valuation distribution increases stochastically, so will his bid distribution. For every possible valuation his opponent will bid higher and the change is beneficial to the auctioneer. We generalize our results to the asymmetric setting with n bidders and no more than two different valuation distributions. Journal of Economic Literature Classification Number: D44.