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Strategic price discounting and rationing in uniform price auctions

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  • Bourjade, Sylvain

Abstract

I modify the uniform-price auction rules in allowing the seller to ration bidders. This allows me to provide a strategic foundation for underpricing when the seller has an interest in ownership dispersion. Moreover, many of the so-called "collusive-seeming" equilibria disappear.

Suggested Citation

  • Bourjade, Sylvain, 2009. "Strategic price discounting and rationing in uniform price auctions," Economics Letters, Elsevier, vol. 105(1), pages 23-27, October.
  • Handle: RePEc:eee:ecolet:v:105:y:2009:i:1:p:23-27
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    Keywords

    Uniform price auctions Rationing Uncertainty Initial public offerings;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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