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Asymptotic properties of equilibrium in discriminatory and uniform price ipv multi-unit auctions

Author

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  • Brett E Katzman

    (Kennesaw State University)

Abstract
This paper confronts the tractability problems that accompany IPV auction models with multi-unit bidder demands. Utilizing a first order approach, the asymptotic properties of symmetric equilibria in discriminatory and uniform price auctions are derived. It is shown that as the number of bidders increases, equilibrium bids converge to valuations in both discriminatory auctions and uniform price auctions where the price paid is determined by the lowest winning bid, thus indicating that the limiting case of these auctions correspond to price taking as in neoclassical models of consumer behavior. However, when the uniform price paid is tied to the highest losing bid, price taking behavior does not ensue and ex post inefficient allocations ares possible. The impact of our results on analysis of k-double auctions with multi-unit bidders demands is also discussed.

Suggested Citation

  • Brett E Katzman, 2009. "Asymptotic properties of equilibrium in discriminatory and uniform price ipv multi-unit auctions," Economics Bulletin, AccessEcon, vol. 29(2), pages 834-846.
    • Handle: RePEc:ebl:ecbull:eb-09-00014
    as

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    References listed on IDEAS

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    2. Chen, Ning & Ghosh, Arpita & Lambert, Nicolas S., 2014. "Auctions for social lending: A theoretical analysis," Games and Economic Behavior, Elsevier, vol. 86(C), pages 367-391.

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    More about this item

    Keywords

    multi-unit auction; asymptotic equilibrium; efficiency;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D0 - Microeconomics - - General

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