Price Regulations in a Multi-unit Uniform Price Auction

Anette Boom

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Inspired by recent regulations in the New York ICAP market, this paper examines the effect of price regulations on a multi-unit uniform price auction. General bid caps reduce the maximum price below the bid cap, but also the minimum potential market price below the cap. A bid cap only for the larger firms does not guarantee a market price below the cap. A sufficiently high bid floor only for relatively small firms destroys some or all pure strategy equilibria with equilibrium prices above the marginal costs. With a general bid floor this happens only with considerably larger bid floors.

JEL-codes: D43 D44 L13 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112998

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