Journal Article

An Efficient Multi-Unit Ascending Auction

Motty Perry and Philip J. Reny

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 72, issue 2, pages 567-592
Published in print April 2005 | ISSN: 0034-6527
Published online April 2005 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/j.1467-937X.2005.00343.x
An Efficient Multi-Unit Ascending Auction

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We provide an ascending auction that yields an efficient outcome when there are many identical units for sale and bidders have interdependent values and downward-sloping demand. Our ascending auction both extends and generalizes Ausubel's (2004) and yields the same outcome as Perry and Reny's (2002) generalization of Vickrey's (1961) sealed-bid auction. There are two key features of our auction. Bidders are permitted both to express different demands against different bidders, as well as to increase their demands. The equilibrium strategies are closely related to the familiar “drop out when price equals value” strategy of the English auction.

Keywords: D44

Journal Article.  14874 words.  Illustrated.

Subjects: Market Structure and Pricing

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