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Date
2008-02Type
- Working Paper
ETH Bibliography
yes
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Abstract
We examine an auction in which the seller determines the supply after observing the bids. We compare the uniform price and the discriminatory auction in a setting of supply uncertainty. Uncertainty is caused by the interplay of two factors: the seller's private information about marginal cost, and the seller's incentive to sell the pro¯t-maximizing quantity given the received bids. In every symmetric mixed strategy equilibrium, bidders submit higher bids in the uniform price auction than in the discriminatory auction. In the two-bidder case this result extends to the set of rationalizable strategies. As a consequence, we ¯nd that the uniform price auction generates higher expected revenue for the seller and higher trade volume. Show more
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https://doi.org/10.3929/ethz-a-005541937Publication status
publishedJournal / series
Economics Working Paper SeriesVolume
Publisher
ETH Zurich, Center of Economic Research (CER-ETH)Subject
Sealed bid multi-unit auctions; Variable supply auctions; Discriminatory and uniform price auctions; Subgame perfect equilibria; Rationalizable strategiesOrganisational unit
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.03729 - Gersbach, Hans / Gersbach, Hans
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ETH Bibliography
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