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Revenue and efficiency ranking in large multi-unit and bundle auctions

Author

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  • Chakraborty, Indranil
  • Shyamalkumar, Nariankadu D.

Abstract

Should a seller use a multi-unit auction for identical and indivisible units of a good? We show, under specific assumptions on the value distributions of the bidders, that in large markets the multi-unit format generates higher (lower) expected revenue compared to the bundled format when the supply is relatively scarce (abundant). In contrast, a large market is shown to be always more efficient under the multi-unit format than its bundled counterpart. Thus under these assumptions a profit maximizing seller is expected to choose the relatively efficient multi-unit format when supply is scarce.

Suggested Citation

  • Chakraborty, Indranil & Shyamalkumar, Nariankadu D., 2014. "Revenue and efficiency ranking in large multi-unit and bundle auctions," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 12-21.
    • Handle: RePEc:eee:mateco:v:50:y:2014:i:c:p:12-21
    DOI: 10.1016/j.jmateco.2013.09.006
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    References listed on IDEAS

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    1. Richard Engelbrecht-Wiggans & Charles M. Kahn, 1998. "Multi-unit auctions with uniform prices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(2), pages 227-258.
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