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Bid Regulations in a Multi-unit Uniform Price Auction

Author

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  • Boom, Anette

    (Department of Economics, Copenhagen Business School)

Abstract

This paper examines the effect of bid regulations on the range of potential equilibrium prices in a multi-unit uniform price auction with heterogenous bidders. General bid caps destroy equilibria with prices above the bid cap and create new equilibria with prices way below the cap. A cap only for larger firms does not guarantee market prices below that cap. A sufficiently high bid floor only for smaller firms destroys some or all pure strategy equilibria despite their prices being above the bid floor. With a general bid floor this happens only with considerably higher bid floors.

Suggested Citation

  • Boom, Anette, 2016. "Bid Regulations in a Multi-unit Uniform Price Auction," Working Papers 01-2016, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2016_001
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    More about this item

    Keywords

    Multi-unit Auctions; Heterogenous Bidders; Bid Regulation;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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