Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Price Auction

Anette Boom ()

No 02-2008, Working Papers from Copenhagen Business School, Department of Economics

Abstract: This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged.

Keywords: na (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Date: 2008-01-01

Downloads: (external link)
http://openarchive.cbs.dk/cbsweb/handle/10398/7664 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:hhs:cbsnow:2008_002

Access Statistics for this paper

More papers in Working Papers from Copenhagen Business School, Department of Economics
Address: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Contact information at EDIRC.
Series data maintained by Lars Nondal ().