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A semi-uniform-price auction for multiple objects

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  • Peyman Khezr

    (University of Queensland)

  • Flavio M. Menezes

    (University of Queensland)

Abstract

This paper proposes a semi-uniform payment rule for selling multiple homogeneous objects. Under the proposed auction, all bidders pay a uniform price equal to the highest losing bid, except the bidder with the highest losing bid who, under some circumstances, pays the second highest losing bid. We show that bidders in this auction face an incentive, on the margin, to increase their bids vis-a-vis their bids in a uniform-price auction. This incentive is sufficient to eliminate the zero revenue equilibrium that has been identified in the multiple-object, uniform-price auction literature.

Suggested Citation

  • Peyman Khezr & Flavio M. Menezes, 2020. "A semi-uniform-price auction for multiple objects," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 139-148, April.
    • Handle: RePEc:spr:etbull:v:8:y:2020:i:1:d:10.1007_s40505-019-00173-5
    DOI: 10.1007/s40505-019-00173-5
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    References listed on IDEAS

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    1. Kagel, John H. & Levin, Dan, 2009. "Implementing efficient multi-object auction institutions: An experimental study of the performance of boundedly rational agents," Games and Economic Behavior, Elsevier, vol. 66(1), pages 221-237, May.
    2. Richard Engelbrecht-Wiggans & Charles M. Kahn, 1998. "Multi-unit auctions with uniform prices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(2), pages 227-258.
    3. Khezr, Peyman & Menezes, Flavio M., 2017. "A new characterization of equilibrium in multiple-object uniform-price auctions," Economics Letters, Elsevier, vol. 157(C), pages 53-55.
    4. Menezes, Flavio M., 1996. "Multiple-unit English auctions," European Journal of Political Economy, Elsevier, vol. 12(4), pages 671-684, December.
    5. Noussair, Charles, 1995. "Equilibria in a Multi-object Uniform Price Sealed Bid Auction with Multi-unit Demands," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 337-351, March.
    6. Back, Kerry & Zender, Jaime F, 1993. "Auctions of Divisible Goods: On the Rationale for the Treasury Experiment," The Review of Financial Studies, Society for Financial Studies, vol. 6(4), pages 733-764.
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    Cited by:

    1. Khezr, Peyman & Pourkhanali, Armin, 2023. "An investigation of auctions in the Regional Greenhouse Gas Initiative," MPRA Paper 119289, University Library of Munich, Germany.
    2. Khezr, Peyman & Pourkhanali, Armin, 2023. "An investigation of auctions in the Regional Greenhouse Gas Initiative," MPRA Paper 118120, University Library of Munich, Germany.
    3. Cumpston, Anne & Khezr, Peyman, 2020. "Multi-Unit Auctions: A Survey of Theoretical Literature," MPRA Paper 101336, University Library of Munich, Germany.

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