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Supply function competition with asymmetric costs: Theory and experiment

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  • Hefti, Andreas
  • Shen, Peiyao

Abstract

We study a multi-unit auction, where bidders differ in their marginal costs, and compare the outcome to the Bertrand (or single-unit auction) analogue.

Suggested Citation

  • Hefti, Andreas & Shen, Peiyao, 2019. "Supply function competition with asymmetric costs: Theory and experiment," Economics Letters, Elsevier, vol. 178(C), pages 24-27.
    • Handle: RePEc:eee:ecolet:v:178:y:2019:i:c:p:24-27
    DOI: 10.1016/j.econlet.2019.02.008
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    References listed on IDEAS

    as
    1. Blume, Andreas, 2003. "Bertrand without fudge," Economics Letters, Elsevier, vol. 78(2), pages 167-168, February.
    2. Kartik, Navin, 2011. "A note on undominated Bertrand equilibria," Economics Letters, Elsevier, vol. 111(2), pages 125-126, May.
    3. Boone, Jan & Larraín Aylwin, María Jose & Müller, Wieland & Ray Chaudhuri, Amrita, 2012. "Bertrand competition with asymmetric costs: Experimental evidence," Economics Letters, Elsevier, vol. 117(1), pages 134-137.
    4. Andreas Hefti & Peiyao Shen & Regina Betz, 2019. "Market power and information effects in a multi-unit auction," ECON - Working Papers 320, Department of Economics - University of Zurich.
    5. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-1277, November.
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    Cited by:

    1. Samuel Häfner, 2023. "Risk aversion in share auctions: Estimating import rents from TRQs in Switzerland," Quantitative Economics, Econometric Society, vol. 14(2), pages 419-470, May.
    2. Andreas Hefti & Peiyao Shen & Regina Betz, 2019. "Market power and information effects in a multi-unit auction," ECON - Working Papers 320, Department of Economics - University of Zurich.
    3. Ghosh, Meenakshi, 2025. "Add-on pricing under cost asymmetries and consumer naïveté," Economic Modelling, Elsevier, vol. 151(C).

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    More about this item

    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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