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Multiple unit auctions with strategic price-quantity decisions

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  • Rafael Tenorio

    (College of Business Administration, University of Notre Dame, Notre Dame, IN 46556, USA)

Abstract

I study a multiple unit auction where symmetric risk-neutral bidders choose prices and quantities endogenously. In the model, bidders (a) may place non-linear valuations on the auctioned units, and (b) bid for several units at the same price ("lumpy" bids). I characterize quantity-symmetric and strictly monotone-increasing price equilibria for discriminatory and competitive auctions, and show that (i) if quantity strategy profiles are equal across auctions revenue- equivalence holds, (ii) expected revenue is higher if bidders bid for the entire supply rather than for shares of it, and (iii) equilibrium allocations may fail to be Pareto-optimal.

Suggested Citation

  • Rafael Tenorio, 1999. "Multiple unit auctions with strategic price-quantity decisions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 13(1), pages 247-260.
    • Handle: RePEc:spr:joecth:v:13:y:1999:i:1:p:247-260
    Note: Received: April 14, 1995; revised version: September 3, 1997
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