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Price Regulations in a Multi-unit Uniform Price Auction

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  • Boom, Anette

Abstract

Inspired by recent regulations in the New York ICAP market, this paper examines the effect of price regulations on a multi-unit uniform price auction. General bid caps reduce the maximum price below the bid cap, but also the minimum potential market price below the cap. A bid cap only for the larger firms does not guarantee a market price below the cap. A sufficiently high bid floor only for relatively small firms destroys some or all pure strategy equilibria with equilibrium prices above the marginal costs. With a general bid floor this happens only with considerably larger bid floors.

Suggested Citation

  • Boom, Anette, 2015. "Price Regulations in a Multi-unit Uniform Price Auction," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112998, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112998
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    References listed on IDEAS

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    1. Regina Betz & Stefan Seifert & Peter Cramton & Suzi Kerr, 2010. "Auctioning greenhouse gas emissions permits in Australia ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), pages 219-238, April.
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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