Mixed strategies in discriminatory divisible-good auctions

E.J. Anderson, Pär Holmberg and A.B. Philpott

No 02/2009, Working Papers from University of Sydney Business School, Discipline of Business Analytics

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)
Date: 2009-11
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Citations: View citations in EconPapers (3)

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http://hdl.handle.net/2123/8162

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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