On the Lowest-Winning-Bid and the Highest-Losing-Bid Auctions

Claudio Mezzetti and Ilia Tsetlin

No 269781, Economic Research Papers from University of Warwick - Department of Economics

Abstract: Theoretical models of multi-unit, uniform-price auctions assume that the price is given by the highest losing bid. In practice, however, the price is usually given by the lowest winning bid. We derive the equilibrium bidding function of the lowest-winning-bid auction when there are k objects for sale and n bidders with unit demand, and prove that it converges to the bidding function of the highest-losing-bid auction if and only if the number of losers n k gets large. When the number of losers grows large, the bidding functions converge at a linear rate and the prices in the two auctions converge in probability to the expected value of an object to the marginal winner.

Keywords: Public Economics; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 18
Date: 2007-11-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: On the lowest-winning-bid and the highest-losing-bid auctions (2008)
Working Paper: On the Lowest-Winning-Bid and the Highest-Losing-Bid Auctions (2007)
Working Paper: On the Lowest-Winning-Bid and the Highest-Losing-Bid Auctions (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269781

DOI: 10.22004/ag.econ.269781

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