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Properties of Equilibrium Strategies in Multiple-Unit, Uniform-Price Auctions

Author

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  • Michal Bresky

Abstract

The paper analyzes the essential properties of bidder equilibrium strategies in the multi-unit uniform-price auction. In the auction the seller offers several identical units for sale, specifies a minimum accepted bid (reservation price) and sets maximum number of bids that any bidder can submit. Under these restrictions bidders use strictly increasing strategies in a symmetric equilibrium more often, and in many cases the reservation price increases the bidder's strategy which is typical in single-unit auctions. Such an auction procedure implies a unique equilibrium strategy in some cases. Thus the number of bid restriction and reservation price present in real-life multi-unit auctions restore some properties of equilibrium strategies typical for single-unit auctions.

Suggested Citation

  • Michal Bresky, 2008. "Properties of Equilibrium Strategies in Multiple-Unit, Uniform-Price Auctions," CERGE-EI Working Papers wp354, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  • Handle: RePEc:cer:papers:wp354
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    File URL: http://www.cerge-ei.cz/pdf/wp/Wp354.pdf
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    References listed on IDEAS

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    1. Palfrey, Thomas R, 1983. "Bundling Decisions by a Multiproduct Monopolist with Incomplete Information," Econometrica, Econometric Society, vol. 51(2), pages 463-483, March.
    2. Engelbrecht-Wiggans, Richard, 1999. "An example of multi-unit auctions with atypically many equilibria," Economics Letters, Elsevier, vol. 65(1), pages 67-69, October.
    3. Draaisma, Teun & Noussair, Charles, 1997. "Optimal bidding in a uniform price auction with multi-unit demand1," Economics Letters, Elsevier, vol. 56(2), pages 157-162, October.
    4. Indranil Chakraborty & Richard Engelbrecht-Wiggans, 2005. "Asymptotic prices in uniform-price multi-unit auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 983-987, November.
    5. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
    6. 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.
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    Cited by:

    1. Michal Bresky, 2008. "Pure Equilibrium Strategies in Multi-unit Auctions with Private Value Bidders," CERGE-EI Working Papers wp376, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Keywords

    Multi-unit auction; uniqueness of equilibrium in discontinuous games; uniform-price auction with reservation price.;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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