Auctioning divisible goods
AbstractWe derive equilibrium bidding strategies in divisible good auctions for asymmetrically informed risk neutral and risk averse bidders when there is random noncompetitive demand. The equilibrium bid schedules contain both strategic considerations and explicit allowances for the winner's curse. When the bidders' information is symmetric, the strategic aspects of bidding imply that there always exist equilibria of a uniform-price auction with lower expected revenue than provided by a discriminatory auction. When bidders are risk averse, there may exist equilibria of the uniform-price auction that provide higher expected revenue than a discriminatory auction.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 19 (2002)
Issue (Month): 4 ()
Note: Received: November 4, 1999; revised version: March 9, 2001
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
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- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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