Strategic Price Discounting and Rationing in Uniform Price Auctions

Rationing as a Strategic Tool in Uniform Price Auctions

Sylvain Bourjade ()

MPRA Paper from University Library of Munich, Germany

Abstract: Uniform price auctions admit a continuum of collusive seeming equilibria due to bidders' market power. In this paper, I modify the auction rules in allowing the seller to ration strategic bidders in order to ensure small bidders' participation. I show that many of these "bad" equilibria disappear when strategic bidders do not know small bidders' willingness to pay. Moreover, when the seller is unconstrained in the quantity she can allocate to small bidders, the unique equilibrium price is the highest that the seller could get.

Keywords: Uniform price Auctions; Treasury Auctions; IPO; Rationing (search for similar items in EconPapers)
JEL-codes: D44 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-cta
Date: 2003-03, Revised 2007-10
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Related works:
Journal Article: Strategic price discounting and rationing in uniform price auctions (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:7260

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