Uniform-Price Auctions with Adjustable Supply

Abstract

In some uniform price auctions, the auctioneer retains flexibility to adjust the total quantity sold after receiving the bids. Would such an auctioneer be better off committing to a fixed quantity and reserve price? Not necessarily. In the simplest possible model, this paper shows that auctioneer expected profit and social welfare are each strictly higher in all equilibria given adjustable supply than in all equilibria given any fixed quantity and reserve price.

Keywords: Uniform-price auction, Adjustable supply

JEL Classification: D44