Multi-Unit Auctions and Competition Stricture
AbstractIs it better for a seller who wants to auction multiple units to face many small bidders or few large bidders? Since multi-unit auction models usually have many equilibria, there are no theoretical predictions on the impact of the competition structure on the performance of a multi-unit auction (in terms of expected revenue and allocation efficiency). Our experimental results with uniform-price auctions support that with a constant competition degree (identical aggregate demand and supply), when the number of bidders increases while individual demand decreases, there is less strategic bidding (demand reduction). It leads to higher expected revenue with a lower variance but allocation efficiency is not significantly different.
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Bibliographic InfoPaper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 09-18.
Length: 27 pages
Date of creation: Dec 2009
Date of revision: Dec 2009
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
- NEP-COM-2009-12-19 (Industrial Competition)
- NEP-EXP-2009-12-19 (Experimental Economics)
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