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Damianov, Damian S.
Becker, Johannes Gerd
- Working Paper
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Rights / licenseIn Copyright - Non-Commercial Use Permitted
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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Journal / seriesEconomics Working Paper Series
PublisherETH, Eidgenössische Technische Hochschule Zürich, CER-ETH - Center of Economic Research at ETH Zurich
SubjectVariable supply auctions; Subgame perfect equilibria; Rationalizable strategies; Sealed bid multi-unit auctions; AUKTIONEN + VERSTEIGERUNGEN (SCHULDRECHT); AUCTIONS + AUCTION SALES (LAW OF OBLIGATIONS); Discriminatory and uniform price auctions
Organisational unit02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
03729 - Gersbach, Hans / Gersbach, Hans
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