Journal Article

Monotone Equilibrium in Multi-Unit Auctions

David McAdams

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 73, issue 4, pages 1039-1056
Published in print October 2006 | ISSN: 0034-6527
Published online October 2006 | e-ISSN: 1467-937X | DOI:
Monotone Equilibrium in Multi-Unit Auctions

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In two-sided multi-unit auctions having a variety of payment rules, including uniform-price and discriminatory auctions, a monotone pure-strategy equilibrium (MPSE) exists when bidders are risk neutral with independent multi-dimensional types and interdependent values. In fact, all mixed-strategy equilibria are ex post allocation and interim expected payment equivalent to MPSE. Thus, for standard expected surplus/revenue analysis, there is no loss restricting attention to monotone strategies.

Keywords: D44

Journal Article.  9492 words.  Illustrated.

Subjects: Market Structure and Pricing

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