Efficiency and information aggregation in large uniform-price auctions

Aaron Bodoh-Creed

Journal of Economic Theory, 2013, vol. 148, issue 6, 2436-2466

Abstract: We prove that the equilibria of a large interdependent-value, uniform-price auction model where bidders have arbitrary preferences for multiple units can be approximated by a nonatomic exchange economy. We show that the uniform-price auction is approximately efficient with a large number of participants and asymptotically aggregates idiosyncratic bidder information into the market price. More generally our analysis framework provides conditions justifying the use of nonatomic limit model approximations to analyze the large-market behavior of game-theoretic models. We demonstrate continuity requirements on the economic primitives sufficient for the equilibrium strategies of the two models to converge as the number of participants in the finite game approaches infinity.

Keywords: Auctions; Information aggregation; Large markets (search for similar items in EconPapers)
JEL-codes: D44 D61 D82 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:6:p:2436-2466

DOI: 10.1016/j.jet.2013.09.012

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