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Auctioning divisible goods

James J.D. Wang, Jaime F. Zender
2002 Economic Theory  
We derive equilibrium bidding strategies in divisible good auctions for asymmetrically informed risk neutral and risk averse bidders when there is random noncompetitive demand.  ...  When the bidders' information is symmetric, the strategic aspects of bidding imply that there always exist equilibria of a uniform-price auction with lower expected revenue than provided by a discriminatory  ...  In a divisible good auction, a seller offers some amount of a good for sale at auction.  ... 
doi:10.1007/s001990100191 fatcat:n5em6d5gbnbwvdceqbdw5osape

Auctions of divisible goods with endogenous supply

Kerry Back, Jaime F. Zender
2001 Economics Letters  
Uniform-price auctions are studied in which the seller may cancel part of the supply after observing the bids. This feature eliminates many of the 'collusive seeming' equilibria of the auction.  ...  Lengwiler (1998) considers a divisible good auction, with two possible bid levels, in which a seller, who produces the good at a constant marginal cost, may vary the quantity sold (up or down) after the  ...  There are equilibria with similarly bad outcomes, from the seller's point of view, when supply 2 is uncertain -see Back and Zender (1993) and Wang and Zender (2001) . *Corresponding author.  ... 
doi:10.1016/s0165-1765(01)00465-7 fatcat:xv5e54xjebbivkqwozfwlndxtm

Strategic price discounting and rationing in uniform price auctions

Sylvain Bourjade
2009 Economics Letters  
Uniform price auctions admit a continuum of collusive seeming equilibria due to bidders' market power.  ...  In this paper, I modify the auction rules in allowing the seller to ration strategic bidders in order to ensure small bidders'participation.  ...  In a uniform price auction, bidders strategically submit demand schedules for a divisible good and the price is set to equate supply and demand.  ... 
doi:10.1016/j.econlet.2009.05.008 fatcat:rar65v6sbjak3mbfidznft6ria

Pay-as-Bid: Selling Divisible Goods to Informed Bidders

Marek Pycia, Kyle Woodward
2014 Social Science Research Network  
With optimal supply and reserve price, the pay-as-bid auction is revenue-equivalent to the uniform-price auction. *  ...  We prove the uniqueness of pure-strategy Bayesian-Nash equilibria in pay-as-bid auctions where symmetrically-informed bidders face uncertain supply, and we establish a tight sucient condition for the existence  ...  the supply unchanged. 6 Divisible-good Revenue Equivalence In practice, sellers of divisible goods are not restricted to running pay-as-bid auctions: the pay-as-bid auction and the uniform-price auction  ... 
doi:10.2139/ssrn.2417512 fatcat:gfd6dwhsp5aafcseolgaly4y7y

Rule Changes and Uncertainty in Discriminatory and Uniform Price Auctions

Hideaki Kiyoshi Kato
2012 Social Science Research Network  
The auction literature indicates that uncertainty about the value of auctioned goods increases underpricing in discriminatory price auctions.  ...  We find that uncertainty resulting from inexperience with an auction mechanism has similar effects.  ...  Introduction Auctions are used in many markets to price and allocate divisible goods. The U.S.  ... 
doi:10.2139/ssrn.2041099 fatcat:woxaxsv3ojgurpueelunmss6c4

RULE CHANGES AND UNCERTAINTY IN DISCRIMINATORY AND UNIFORM PRICE AUCTIONS

Jaclyn Beierlein, Hideaki Kiyoshi Kato
2007 Journal of Financial Research  
Conclusions Discriminatory price and uniform price auctions are used around the world to sell divisible goods such as Treasury securities, IPOs of common stock, foreign exchange, and gold; thus, it is  ...  We find that uncertainty resulting from inexperience with an auction mechanism has similar effects.  ...  Introduction Auctions are used in many markets to price and allocate divisible goods. The U.S.  ... 
doi:10.1111/j.1475-6803.2007.00203.x fatcat:xmpmaw6h4zcd3bva4zj7v6uz3u

Britain's Electricity Capacity Auctions: Lessons from Colombia and New England

David Harbord, Marco Pagnozzi
2014 Electricity Journal  
Among alternative auction design options, a sealed-bid auction is a better choice.  ...  Experience in both Colombia and New England provide a stark warning about the dangers of placing descending clock auctions at the center of electricity capacity markets.  ...  The two most commonly used multi-object sealed-bid auctions for a homogeneous divisible good such as generation capacity are the uniform-price (''pay-asclear'') and the discriminatoryprice (''pay-as-bid  ... 
doi:10.1016/j.tej.2014.05.004 fatcat:a5ohx3vxbbddtle35tl3aqv4fi

Supply Function Equilibria of Pay-as-Bid Auctions

Par Holmberg
2008 Social Science Research Network  
Demand by the auctioneer is uncertain as in the supply function equilibrium model. A closed form expression is derived.  ...  Abstract This paper characterizes the Nash equilibrium in a pay-as-bid (discriminatory), divisible-good, procurement auction.  ...  This paper contributes to the on-going discussion by characterizing strategic bidding behaviour in divisible-good, pay-as-bid procurement auctions and by comparing bidding in UPA and PABA.  ... 
doi:10.2139/ssrn.1681329 fatcat:jgssy7a7czghbjwvat6hraes3m

Supply function equilibria of pay-as-bid auctions

Pär Holmberg
2009 Journal of Regulatory Economics  
Demand by the auctioneer is uncertain as in the supply function equilibrium model. A closed form expression is derived.  ...  Abstract This paper characterizes the Nash equilibrium in a pay-as-bid (discriminatory), divisible-good, procurement auction.  ...  This paper contributes to the on-going discussion by characterizing strategic bidding behaviour in divisible-good, pay-as-bid procurement auctions and by comparing bidding in UPA and PABA.  ... 
doi:10.1007/s11149-009-9091-6 fatcat:lrxjlgqewzdkxfibiwpcbgrfae

Auction Pricing and Market-Space Competition

Giuseppe Cappiello
2002 Symphonya Emerging Issues in Management  
An auction is a tool used to determine the exchange ratio, that is the price to be paid for goods, services or rights.  ...  The volume of trading carried out through auctions has increased over the last few years as information technology has spread ever further and data transmission connections have improved.  ...  based on the type of goods auctioned (single and indivisible or uniform and divisible), on the auction format (sealed bid or sequential) and on the sale price 10 .  ... 
doi:10.4468/2002.1.11cappiello fatcat:i5jiujswi5fz7eaopwxcatqgzi

Incentive mechanism for allocating total permitted pollution discharge capacity and evaluating the validity of free allocation

Congjun Rao, Yong Zhao, Chuanfeng Li
2011 Computers and Mathematics with Applications  
Second, an incentive mechanism for allocating TPPDC is proposed based on the uniform price auction of divisible goods, and an evaluation model to evaluate the validity for the free allocation of TPPDC  ...  The results of our study will provide the government environmental management departments with theoretical basis and scientific methods to effectively implement the pollutant gross control system and design  ...  Furthermore, the authors wish to thank the Department of Environmental Protection of Hubei Province for providing us with valuable data information.  ... 
doi:10.1016/j.camwa.2011.08.015 fatcat:vmwtcc7jk5ahrijlfzw4qqmng4

Centralizing Disconnected Markets? An Irrelevance Result

Milena Wittwer
2017 Social Science Research Network  
This article compares centralized with disconnected markets in which n > 2 strategic agents trade two perfectly divisible goods.  ...  In a multi-goods uniform-price double auction (centralized market) traders can make their demand for one good contingent on the price of the other good.  ...  In the model, n > 2 agents, each with an independent private type, have joint-preferences over two perfectly divisible goods with fixed or random total supply.  ... 
doi:10.2139/ssrn.2910113 fatcat:5av7str6sjcclgxup5lzcu6k2y

Electricity Markets: Designing Auctions Where Suppliers Have Uncertain Costs

Par Holmberg, Frank Wolak
2015 Social Science Research Network  
Abstract We analyse how the market design in ‡uences the bidding behaviour in multi-unit auctions, such as wholesale electricity markets.  ...  It is shown that competition improves for increased market transparency and we identify circumstances where the auctioneer prefers uniform to discriminatory pricing.  ...  Holmberg et al. (2013) solve for equilibria of stepped supply functions in divisible-good auctions with discrete price levels.  ... 
doi:10.2139/ssrn.2754407 fatcat:nl4flen4andzffktfgynrydydq

THE EFFECT OF AUCTION FORMAT ON EFFICIENCY AND REVENUE IN DIVISIBLE GOODS AUCTIONS: A TEST USING KOREAN TREASURY AUCTIONS*

BOO-SUNG KANG, STEVEN L. PULLER
2008 Journal of Industrial Economics  
This paper measures the efficiency and revenue properties of the two most popular formats for divisible goods auctions -the uniform-price and discriminatory auction.  ...  We analyze bids into the Korean Treasury auctions which have used both formats.  ...  Introduction Divisible goods auctions are becoming an increasingly popular means to transact in some markets.  ... 
doi:10.1111/j.1467-6451.2008.00342.x fatcat:f4plkrfv3nfcbcafi53xankefi

Modeling Electricity Auctions

Natalia Fabra, Nils-Henrik von der Fehr, David Harbord
2002 Electricity Journal  
The recent debates over discriminatory versus uniform-price auctions in the UK and elsewhere have revealed an incomplete understanding of the limitations of some popular auction models when applied to  ...  This has led certain regulatory authorities to prefer discriminatory auctions on the basis of reasoning from models which are not directly applicable to any existing electricity market.  ...  This means that all electricity auctions are discrete multi-unit auctions rather than continuous "share auctions" or auctions for perfectly divisible goods.  ... 
doi:10.1016/s1040-6190(02)00347-0 fatcat:kgzl7pzvvzgsvjfyz7da2p37jm
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