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A new characterization of equilibrium in multiple-object uniform-price auctions

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  • Khezr, Peyman
  • Menezes, Flavio M.

Abstract

This paper characterizes equilibrium bidding behavior in a multi-unit uniform-price auction. As posited by Noussair (1995) and Engelbrecht-Wiggans and Kahn (1998), when bidders demand two units and valuations are independent, equilibrium bidding behavior entails bidding their values for the first unit, and bidding below their valuations for the second unit. We identify some errors in the analysis of Noussair (1995) and Engelbrecht-Wiggans and Kahn (1998), and provide a characterization of equilibrium behavior which involves a threshold value that separates bidders who bid zero for the second unit from those who shade their bids for the second unit.

Suggested Citation

  • Khezr, Peyman & Menezes, Flavio M., 2017. "A new characterization of equilibrium in multiple-object uniform-price auctions," Economics Letters, Elsevier, vol. 157(C), pages 53-55.
    • Handle: RePEc:eee:ecolet:v:157:y:2017:i:c:p:53-55
    DOI: 10.1016/j.econlet.2017.05.031
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    References listed on IDEAS

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    1. Richard Engelbrecht-Wiggans & Charles M. Kahn, 1998. "Multi-unit auctions with uniform prices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(2), pages 227-258.
    2. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    3. Menezes, Flavio M., 1996. "Multiple-unit English auctions," European Journal of Political Economy, Elsevier, vol. 12(4), pages 671-684, December.
    4. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721.
    5. Peter Cramton & Yoav Shoham & Richard Steinberg (ed.), 2006. "Combinatorial Auctions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033429, December.
    6. Noussair, Charles, 1995. "Equilibria in a Multi-object Uniform Price Sealed Bid Auction with Multi-unit Demands," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 337-351, March.
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    Cited by:

    1. Peyman Khezr & Flavio M. Menezes, 2020. "A semi-uniform-price auction for multiple objects," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 139-148, April.
    2. Cumpston, Anne & Khezr, Peyman, 2020. "Multi-Unit Auctions: A Survey of Theoretical Literature," MPRA Paper 101336, University Library of Munich, Germany.
    3. Peyman Khezr & Anne Cumpston, 2022. "A review of multiunit auctions with homogeneous goods," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1225-1247, September.

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    More about this item

    Keywords

    Multiple-objects; Uniform-price; Auctions; Equilibrium;
    All these keywords.

    JEL classification:

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

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