Exposure Problem in Multi-unit Auctions
We characterize the optimal bidding strategies of local and global bidders for two heterogenous licenses in a multi-unit simultaneous ascending auction. The global bidder wants to win both licenses to enjoy synergies; therefore, she bids more than her stand-alone valuation of a license. This exposes her to the risk of losing money even when she wins all licenses. We determine the optimal bidding strategies in the presence of an exposure problem. By using simulation methods, first, we show the frequency of inefficient allocation in the simultaneous ascending auction. Then, we show that the Vickrey-Clarke-Groves (VCG) mechanism may generate more revenue than the simultaneous ascending auction.
|Date of creation:||Jul 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iser.osaka-u.ac.jp/index-e.html
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Englmaier, Florian & Guillén, Pablo & Llorente, Loretoe & Onderstal, Sander & Sausgruber, Rupert, 2009.
"The chopstick auction,"
Munich Reprints in Economics
22029, University of Munich, Department of Economics.
- Domenico Menicucci, 2003.
"Optimal two-object auctions with synergies,"
Review of Economic Design,
Springer, vol. 8(2), pages 143-164, October.
- Chow, YuenLeng & Yavas, Abdullah, 2008. "Auctions with Positive Synergies: Experimental Evidence," MPRA Paper 12669, University Library of Munich, Germany.
- Sandro Brusco & Giuseppe Lopomo, 2002.
"Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities,"
Review of Economic Studies,
Oxford University Press, vol. 69(2), pages 407-436.
- Brusco, Sandro & Lopomo, Giuseppe, 2002. "Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 407-36, April.
- Sandro Brusco & Giuseppe Lopomo, 2004. "Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities," Levine's Bibliography 122247000000000385, UCLA Department of Economics.
- Debasis Mishra & David C. Parkes, 2007.
"Multi-item Vickrey-Dutch auctions,"
Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers
07-04, Indian Statistical Institute, New Delhi, India.
- Robert W. Rosenthal & Ruqu Wang, 1995.
"Simultaneous Auctions with Synergies and Common Values,"
0060, Boston University - Industry Studies Programme.
- Rosenthal, Robert W. & Wang, Ruqu, 1996. "Simultaneous Auctions with Synergies and Common Values," Games and Economic Behavior, Elsevier, vol. 17(1), pages 32-55, November.
- Peter Cramton & Yoav Shoham & Richard Steinberg, 2004. "Combinatorial Auctions," Papers of Peter Cramton 04mit, University of Maryland, Department of Economics - Peter Cramton, revised 2004.
- Sandro Brusco & Giuseppe Lopomo, 2009.
"Simultaneous ascending auctions with complementarities and known budget constraints,"
Springer, vol. 38(1), pages 105-124, January.
- Sandro Brusco & Giuseppe Lopomo, 2005. "Simultaneous Ascending Auctions with Complementarities and Known Budget Constraints," Department of Economics Working Papers 05-13, Stony Brook University, Department of Economics.
- Gian Albano & Fabrizio Germano & Stefano Lovo, 2006. "Ascending auctions for multiple objects: the case for the Japanese design," Economic Theory, Springer, vol. 28(2), pages 331-355, 06.
- Sano, Ryuji, 2012. "Non-bidding equilibrium in an ascending core-selecting auction," Games and Economic Behavior, Elsevier, vol. 74(2), pages 637-650.
- Wang, Ruqu, 2000. "Bidding and renegotiation in procurement auctions," European Economic Review, Elsevier, vol. 44(8), pages 1577-1597, August.
- Kagel, John H. & Levin, Dan, 2005. "Multi-unit demand auctions with synergies: behavior in sealed-bid versus ascending-bid uniform-price auctions," Games and Economic Behavior, Elsevier, vol. 53(2), pages 170-207, November.
When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0848. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fumiko Matsumoto)
If references are entirely missing, you can add them using this form.