Optimal Bidding Strategies in Non-Sealed Bid Online Auctions of Common Products with Quantity Uncertainty

Chonawee Supatgiat (), John Birge and Rachel Q. Zhang
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Rachel Q. Zhang: Cornell University

Game Theory and Information from University Library of Munich, Germany

Abstract: We consider non-sealed bid online auctions of common products with quantity uncertainty. Both first-price (also known as pay-as-you-bid) and uniform-price auctions are considered. In these auctions, all bidders have the same valuation of the products but may have different demand quantities. The number of units being auctioned can be random with a known and common distribution. Each bidder decides on a bidding price to maximize her profit. We derive Nash equilibrium solutions, i.e., bidders' optimal bidding strategies, and the resulting market clearing prices.

Keywords: multi-unit auctions; pure common value auction; discrete bid level; bid increment; E-commerce (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2002-11-10, Revised 2003-03-05
New Economics Papers: this item is included in nep-fin and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0211005

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