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- Title
Multi-unit auctions with private information: an indivisible unit continuous price model.
- Authors
Alvarez, Francisco; Mazón, Cristina
- Abstract
We construct a model of multi-unit auctions in which I bidders bid for two indivisible units of a common value good. Using a first-order approach, we find that there are equilibria in which bidders bid the same price for both units in the discriminatory auction, but not in the uniform auction. When there are only two bidders, under certain conditions, there are linear equilibria for both the discriminatory and the uniform auction formats. In all equilibria, bidders equalize the expected marginal benefit of bidding to the marginal costs of bidding. We show that comparison of the seller's expected revenue across auction formats depends only on the ratio of the precision of private information to the precision of public information.
- Subjects
AUCTIONS; ECONOMIC models; LINEAR systems; DIRECT costing; ECONOMIC equilibrium; COMPARATIVE studies; ECONOMIC research
- Publication
Economic Theory, 2012, Vol 51, Issue 1, p35
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-010-0594-2