Bidding in Multi-Unit Auctions under Limited Information

Bernhard Kasberger and Kyle Woodward

Papers from arXiv.org

Abstract: We study multi-unit auctions in which bidders have limited knowledge of opponent strategies and values. We characterize optimal prior-free bids; these bids minimize the maximal loss in expected utility resulting from uncertainty surrounding opponent behavior. Optimal bids are readily computable despite bidders having multi-dimensional private information, and in certain cases admit closed-form solutions. In the pay-as-bid auction the minimax-loss bid is unique; in the uniform-price auction the minimax-loss bid is unique if the bidder is allowed to determine the quantities for which they bid, as in many practical applications. We compare minimax-loss bids and auction outcomes across auction formats, and derive testable predictions.

Date: 2021-12, Revised 2023-04
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
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http://arxiv.org/pdf/2112.11320 Latest version (application/pdf)

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Working Paper: Bidding in Multi-Unit Auctions under Limited Information (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2112.11320

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