Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged.
This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged.

Workshop

WorkshopArne Ryde Workshop with Copenhagen Network for Experimental Economics (CNEE)
LocationKulturen
CountrySweden
CityLund
Period16/11/201716/11/2017
Internet address

Bibliographical note

CBS Library does not have access to the material

Cite this

Boom, A. (2017). Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction. Paper presented at Arne Ryde Workshop with Copenhagen Network for Experimental Economics (CNEE), Lund, Sweden.
Boom, Anette. / Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction. Paper presented at Arne Ryde Workshop with Copenhagen Network for Experimental Economics (CNEE), Lund, Sweden.13 p.
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Boom, A 2017, 'Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction' Paper presented at, Lund, Sweden, 16/11/2017 - 16/11/2017, .

Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction. / Boom, Anette.

2017. Paper presented at Arne Ryde Workshop with Copenhagen Network for Experimental Economics (CNEE), Lund, Sweden.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction

AU - Boom,Anette

N1 - CBS Library does not have access to the material

PY - 2017

Y1 - 2017

N2 - This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged.

AB - This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged.

M3 - Paper

ER -

Boom A. Equilibrium Selection with Risk Dominance in a Multiple-unit Unit Uniform Price Auction. 2017. Paper presented at Arne Ryde Workshop with Copenhagen Network for Experimental Economics (CNEE), Lund, Sweden.