IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

A Well-known Rationing Game

  • Ehrhart, Karl-Martin

    ()

    (Universitaet Karlsruhe)

Registered author(s):

    Monopolies are frequently characterized by the following allocation rule: if the total demand is not greater than the supply, each buyer receives her desired amount in full; and if the total demand exceeds the supply, the supply is distributed proportionally according to the individual desired amounts. Examples include the fixed rate tender, employed in refinancing operations; transactions in supply chains; the allocation of issued stocks; and the distribution of financial support to competing projects. In such a 'rationing game' there is an incentive for the buyers to ask for more than they actually want and that the allocation rule may generate a game without an equilibrium (including in mixed strategies), even if the supply satisfies the true demand. We therefore conclude that this widely employed rule is an unsatisfactory method for allocating goods. Placing an upper bound on the bids will create a game with an equilibrium; however, buyers may still be induced to exaggerate their demands. An infinite repeated game can have an equilibrium even if the equilibrium set of the stage game is empty. Nonetheless, it is possible to fashion an alternative allocation rule which induces buyers to reveal their true demand.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 01-36.

    as
    in new window

    Length: 24 pages
    Date of creation: 01 Dec 2000
    Date of revision:
    Handle: RePEc:xrs:sfbmaa:01-36
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
    Contact details of provider: Postal: D-68131 Mannheim
    Phone: (49) (0) 621-292-2547
    Fax: (49) (0) 621-292-5594
    Web page: http://www.sfb504.uni-mannheim.de/
    Email:


    More information through EDIRC

    Web page: http://www.sfb504.uni-mannheim.de

    Order Information: Email:


    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:xrs:sfbmaa:01-36. 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: (Carsten Schmidt)

    The email address of this maintainer does not seem to be valid anymore. Please ask Carsten Schmidt to update the entry or send us the correct address

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.