Bid Regulations in a Multi-unit Uniform Price Auction

Research output: Working paperResearch

Abstract

This paper examines the effect of bid regulations on the range of potential equilibrium prices in a multi-unit uniform price auction with heterogenous bidders. General bid caps destroy equilibria with prices above the bid cap and create new equilibria with prices way below the cap. A cap only for larger rms does not guarantee market prices below that cap. A suffciently high bid floor only for smaller firms destroys some or all pure strategy equilibria despite their prices being above the bid floor. With a general bid floor this happens only with considerably higher bid floors.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School, CBS
Pages37
Publication statusPublished - 2016
SeriesWorking Paper / Department of Economics. Copenhagen Business School
Number1-2016

Cite this

Boom, A. (2016). Bid Regulations in a Multi-unit Uniform Price Auction. (pp. 37). Copenhagen Business School, CBS. Working Paper / Department of Economics. Copenhagen Business School, No. 1-2016 http://hdl.handle.net/10398/9409