Auctions with variable supply: Uniform price versus discriminatory

B-Tier
Journal: European Economic Review
Year: 2010
Volume: 54
Issue: 4
Pages: 571-593

Authors (2)

Damianov, Damian S. (Durham University) Becker, Johannes Gerd (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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, where 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 profit-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 find that the uniform price auction generates a higher expected revenue for the seller and a higher trade volume.

Technical Details

RePEc Handle
repec:eee:eecrev:v:54:y:2010:i:4:p:571-593
Journal Field
General
Author Count
2
Added to Database
2026-01-25