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Multi-Unit Auctions and Competition Stricture

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  • Raphaële Préget
  • Sophie Thoyer

Abstract

Is it better for a seller who wants to auction multiple units to face many small bidders or few large bidders? Since multi-unit auction models usually have many equilibria, there are no theoretical predictions on the impact of the competition structure on the performance of a multi-unit auction (in terms of expected revenue and allocation efficiency). Our experimental results with uniform-price auctions support that with a constant competition degree (identical aggregate demand and supply), when the number of bidders increases while individual demand decreases, there is less strategic bidding (demand reduction). It leads to higher expected revenue with a lower variance but allocation efficiency is not significantly different.

Suggested Citation

  • Raphaële Préget & Sophie Thoyer, 2009. "Multi-Unit Auctions and Competition Stricture," Working Papers 09-18, LAMETA, Universtiy of Montpellier, revised Dec 2009.
    • Handle: RePEc:lam:wpaper:09-18
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    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2009-18.pdf
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    References listed on IDEAS

    as
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