Multi-Unit Auctions in Which Almost Every Bid Wins

University of Illinois, Bureau of Economics & Business Research Working Paper No. 98-0120

Posted: 27 Oct 1999

See all articles by Richard Engelbrecht-Wiggans

Richard Engelbrecht-Wiggans

University of Illinois at Urbana-Champaign - Department of Business Administration

Charles M. Kahn

University of Illinois, Urbana-Champaign; Bank of Canada; Feseral Reserve Bank of Saint Louis

Date Written: November, 1999

Abstract

We consider multi-unit auctions in which there are enough units so that each bidder but one wins every unit that they bid on. We characterize the equilibrium bidding strategy for three different payment rules: the pay-your-bid auction, the uniform price auction in which the price equals the lowest winning bid, and the uniform price auction in which the price equals the highest losing bid. We also consider the Vickrey pricing rule. In the case we examine, the four auctions are all efficient and thus are revenue equivalent.

JEL Classification: D44

Suggested Citation

Engelbrecht-Wiggans, Richard and Kahn, Charles M., Multi-Unit Auctions in Which Almost Every Bid Wins (November, 1999). University of Illinois, Bureau of Economics & Business Research Working Paper No. 98-0120, Available at SSRN: https://ssrn.com/abstract=150597

Richard Engelbrecht-Wiggans (Contact Author)

University of Illinois at Urbana-Champaign - Department of Business Administration ( email )

1206 South Sixth Street
Champaign, IL 61820
United States
217-333-1028 (Phone)

Charles M. Kahn

University of Illinois, Urbana-Champaign ( email )

Department of Finance
340 Wohlers Hall
Champaign, IL 61820
United States

HOME PAGE: http://kahnfrance.com/cmk/

Bank of Canada

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Feseral Reserve Bank of Saint Louis

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Saint Louis, MO 63011
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