Optimal Bidding Strategies in Non-Sealed Bid Online Auctions of Common Products with Quantity Uncertainty
AbstractWe consider non-sealed bid online auctions of common products with quantity uncertainty. Both first-price (also known as pay-as-you-bid) and uniform-price auctions are considered. In these auctions, all bidders have the same valuation of the products but may have different demand quantities. The number of units being auctioned can be random with a known and common distribution. Each bidder decides on a bidding price to maximize her profit. We derive Nash equilibrium solutions, i.e., bidders' optimal bidding strategies, and the resulting market clearing prices.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 0211005.
Length: 32 pages
Date of creation: 10 Nov 2002
Date of revision: 05 Mar 2003
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multi-unit auctions; pure common value auction; discrete bid level; bid increment; E-commerce;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-11-18 (All new papers)
- NEP-FIN-2002-11-18 (Finance)
- NEP-IND-2002-11-18 (Industrial Organization)
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