Multiple unit auctions with strategic price-quantity decisions

Rafael Tenorio
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Rafael Tenorio: College of Business Administration, University of Notre Dame, Notre Dame, IN 46556, USA

Economic Theory, 1999, vol. 13, issue 1, 247-260

Abstract: I study a multiple unit auction where symmetric risk-neutral bidders choose prices and quantities endogenously. In the model, bidders (a) may place non-linear valuations on the auctioned units, and (b) bid for several units at the same price ("lumpy" bids). I characterize quantity-symmetric and strictly monotone-increasing price equilibria for discriminatory and competitive auctions, and show that (i) if quantity strategy profiles are equal across auctions revenue- equivalence holds, (ii) expected revenue is higher if bidders bid for the entire supply rather than for shares of it, and (iii) equilibrium allocations may fail to be Pareto-optimal.

Date: 1998-12-04
Note: Received: April 14, 1995; revised version: September 3, 1997
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