Does SFE Correspond to Expected Behavior in the Uniform Price Auction?

Alexander Vasin () and Marina Dolmatova ()
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Alexander Vasin: Lomonosov Moscow State University
Marina Dolmatova: Lomonosov Moscow State University

A chapter in Operations Research Proceedings 2012, 2014, pp 231-236 from Springer

Abstract: Abstract We consider a game corresponding to the uniform price supply function auction for a homogenous good. We present best response dynamics analysis for a repeated auction game and show that under a linear marginal cost function, it converges to the SFE with a geometric rate. However, for a fixed marginal cost and limited production capacity, the best reply may not exist at some step so the dynamics does not converge to SFE in general.

Keywords: Marginal Cost; Demand Function; Capacity Constraint; Supply Function; Walrasian Equilibrium (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:oprchp:978-3-319-00795-3_34

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DOI: 10.1007/978-3-319-00795-3_34

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