Price Regulations in a Multi-unit Uniform Price Auction

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Abstract

Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small firms.
Original languageEnglish
Publication date2014
Number of pages27
Publication statusPublished - 2014
EventThe 9th Nordic Workshop in Industrial Organization. NORIO 2014 - University of Oslo, Oslo, Norway
Duration: 2 Jun 20143 Jun 2014
Conference number: 9
http://www.sv.uio.no/econ/english/research/news-and-events/events/conferences/2014/dokumenter/programme.html

Workshop

WorkshopThe 9th Nordic Workshop in Industrial Organization. NORIO 2014
Number9
LocationUniversity of Oslo
CountryNorway
CityOslo
Period02/06/201403/06/2014
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