Bid Regulations in a Multi-unit Uniform Price Auction

Anette Boom

No 01-2016, Working Papers from Copenhagen Business School, Department of Economics

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.

Keywords: Multi-unit Auctions; Heterogenous Bidders; Bid Regulation (search for similar items in EconPapers)
JEL-codes: D43 D44 L12 L13 L51 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016-12-01
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
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