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Uniform Price Auctions with Asymmetric Bidders

Author

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  • Bourjade Sylvain

    (Toulouse Business School, Toulouse, France)

Abstract

In uniform price auctions, multiple prices are sustainable in equilibrium as a result of the market power of bidders. I show that low price equilibria are removed in a framework with asymmetric bidders who cannot anticipate the seller’s rationing strategy. Attracting high cost bidders’ participation in the auction induces the low cost bidders to bid more aggressively in order to eliminate the high cost bidders. Ex-post optimal equilibria with non-increasing demand schedules only exist when the seller is allowed to use any degree of rationing.

Suggested Citation

  • Bourjade Sylvain, 2019. "Uniform Price Auctions with Asymmetric Bidders," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-14, January.
    • Handle: RePEc:bpj:bejtec:v:19:y:2019:i:1:p:14:n:2
    DOI: 10.1515/bejte-2016-0188
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    References listed on IDEAS

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    Cited by:

    1. Bourjade, Sylvain, 2009. "Strategic price discounting and rationing in uniform price auctions," Economics Letters, Elsevier, vol. 105(1), pages 23-27, October.

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    More about this item

    Keywords

    asymmetric bidders; EU UTS; treasury auctions; uniform price auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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