Multi-unit auctions with private information: an indivisible unit continuous price model

Francisco Alvarez Gonzalez () and Cristina Mazón ()

Economic Theory, 2012, vol. 51, issue 1, 35-70

Abstract: We construct a model of multi-unit auctions in which I bidders bid for two indivisible units of a common value good. Using a first-order approach, we find that there are equilibria in which bidders bid the same price for both units in the discriminatory auction, but not in the uniform auction. When there are only two bidders, under certain conditions, there are linear equilibria for both the discriminatory and the uniform auction formats. In all equilibria, bidders equalize the expected marginal benefit of bidding to the marginal costs of bidding. We show that comparison of the seller’s expected revenue across auction formats depends only on the ratio of the precision of private information to the precision of public information. Copyright Springer-Verlag 2012

Keywords: Multi-unit auctions; Indivisible good auctions; Treasury auctions; D44 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s00199-010-0594-2

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