Uniform-Price Auctions with Adjustable Supply

32 Pages Posted: 20 Aug 2006

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David McAdams

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

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Date Written: August 2006

Abstract

In the uniform-price auction with adjustable supply, the seller decides how much to sell after receiving the bids so as to maximize its ex post profit. Given N bidders and adjustable supply, all equilibria of the uniform-price auction lead to price on order 1/N3 below the Walrasian price. By contrast, given the usual market-clearing rule it is well-known that the uniform-price auction can lead to equilibrium prices on order 1/N below the Walrasian price.

Keywords: Uniform-Price Auctions

Suggested Citation

McAdams, David, Uniform-Price Auctions with Adjustable Supply (August 2006). MIT Sloan Research Paper No. 4618-06. Available at SSRN: https://ssrn.com/abstract=925276 or http://dx.doi.org/10.2139/ssrn.925276

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Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

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