Interconnected pay-as-bid auctions

Milena Wittwer

Games and Economic Behavior, 2020, vol. 121, issue C, 506-530

Abstract: I develop a framework to study common situations, in which substitute goods are sold in separate, good-specific multi-unit (pay-as-bid) auctions. I characterize bidding behavior and investigate auction design features that could increase revenues. The setting I develop gives rise to an essentially unique symmetric Nash equilibrium in which bidders shade their bids more strongly when goods are close substitutes. To increase revenues, the seller can offer total supply quantities that are (stochastically) unequal in size. This fosters more aggressive bidding and provides a rationale to hold separate, parallel auctions instead of selling all in one auction.

Keywords: Multi-unit auctions; Divisible goods; Aggregate uncertainty; Substitutes (search for similar items in EconPapers)
JEL-codes: D44 D47 E58 G18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:121:y:2020:i:c:p:506-530

DOI: 10.1016/j.geb.2020.03.009

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