Revenue and Efficiency in Multi-Unit Uniform-Price Auctions

Michal Bresky

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: I show that in a private value multi-unit uniform-price auction, the reservation price increases both the efficiency and revenue. In equilibrium the difference between the true value of a unit and the submitted bid (shading) is different for each unit; therefore, the seller cannot allocate units efficiently, i.e., to those who value them the most. When the seller increases the reservation price, the bidders increase their bids on the units with greater shading. Then more often the units are allocated among those who have higher values for them, that is, efficient, although some bidders with a low value do not participate in the auction. In contrast to some other auction formats, for a low range of reservation prices, the higher the reservation price, the higher is both the expected efficiency and revenue

Keywords: Multi-unit auction; multiple-object auction; market efficiency; optimal selling mechanism; discriminatory and uniform price auction with reservation price. (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-cta
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: Revenue and efficiency in multi-unit uniform-price auctions (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp384

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