Mixed Strategies in Discriminatory Divisible-good Auctions

Edward J. Anderson, Pär Holmberg and Andrew B. Philpott
Additional contact information
Edward J. Anderson: Faculty of Economics and Business, Postal: University of Sydney, Australia
Andrew B. Philpott: Department of Engineering Science, Postal: University of Auckland, Australia

No 814, Working Paper Series from Research Institute of Industrial Economics

Abstract: Author: Edward J. Anderson, Pär Holmberg and Andrew B. Philpott Keywords: Pay-as-bid Auction; Divisible Good Auction; Mixed Strategy Equilibria; Wholesale Electricity Markets Pages: 71 Published: November 24, 2009 JEL-codes: D43; D44; C72 Download Wp814.pdf (756 kB) Abstract Using the concept of market-distribution functions, we derive general optimality conditions for discriminatory divisible-good auctions, which are also applicable to Bertrand games and non-linear pricing. We introduce the concept of offer distribution function to analyze randomized offer curves, and characterize mixed-strategy Nash equilibria for pay-as-bid auctions where demand is uncertain and costs are common knowledge; a setting for which pure-strategy supply function equilibria typically do not exist. We generalize previous results on mixtures over horizontal offers as in Bertrand-Edgeworth games, but more importantly we characterize novel mixtures over partly increasing supply functions.

Keywords: Pay-as-bid Auction; Divisible Good Auction; Mixed Strategy Equilibria; Wholesale Electricity Markets (search for similar items in EconPapers)
JEL-codes: C72 D43 D44 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2009-11-24
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (4)

Published as Anderson, Edward J., Pär Holmberg and Andrew B. Philpott, 'Mixed Strategies in Discriminatory Divisible-good Auctions' in Rand Journal of Economics, 2013, pages 1-32.

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https://www.ifn.se/Wfiles/Wp/wp814.pdf (application/pdf)

Related works:
Journal Article: Mixed strategies in discriminatory divisible-good auctions (2013)
Working Paper: Mixed strategies in discriminatory divisible-good auctions (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0814

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