Market Power And Welfare In Asymmetric Divisible Good Auctions
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| Author | : Carolina Manzano |
| Publisher | : |
| Total Pages | : 45 |
| Release | : 2016 |
| Genre | : Auctions |
| ISBN | : |
We analyze a divisible good uniform-price auction that features two groups each with a finite number of identical bidders. Equilibrium is unique, and the relative market power of a group increases with the precision of its private information but declines with its transaction costs. In line with empirical evidence, we find that an increase in transaction costs and/or a decrease in the precision of a bidding group's information induces a strategic response from the other group, which thereafter attenuates its response to both private information and prices. A "stronger" bidding group -- which has more precise private information, faces lower transaction costs, and is more oligopsonistic -- has more market power and so will behave competitively only if it receives a higher per capita subsidy rate. When the strong group values the asset no less than the weak group, the expected deadweight loss increases with the quantity auctioned and also with the degree of payoff asymmetries. Market power and the deadweight loss may be negatively associated.
| Author | : Luis C. Corchón |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 567 |
| Release | : 2018-02-23 |
| Genre | : Business & Economics |
| ISBN | : 178536328X |
The first volume of this wide-ranging Handbook contains original contributions by world-class specialists. It provides up-to-date surveys of the main game-theoretic tools commonly used to model industrial organization topics. The Handbook covers numerous subjects in detail including, among others, the tools of lattice programming, supermodular and aggregative games, monopolistic competition, horizontal and vertically differentiated good models, dynamic and Stackelberg games, entry games, evolutionary games with adaptive players, asymmetric information, moral hazard, learning and information sharing models.
| Author | : William G. Shepherd |
| Publisher | : |
| Total Pages | : 328 |
| Release | : 1970 |
| Genre | : Competition |
| ISBN | : |
| Author | : Orly Sade |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 2005 |
| Genre | : |
| ISBN | : |
We show that asymmetry in bidders' capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit common value auctions. This effect seems to be related to the increased difficulty of coordination when there are fundamental differences between bidders. The discriminatory auction is shown to be more susceptible to collusion than is the uniform-price auction and consequently asymmetry in capacity constraints plays a more important role in the discriminatory auction. These results suggest that the revenue maximizing auction format may depend heavily on a variety of factors specific to particular auction settings.
| Author | : Daniel Friedman |
| Publisher | : Routledge |
| Total Pages | : 456 |
| Release | : 2018-05-04 |
| Genre | : Social Science |
| ISBN | : 0429961081 |
This book focuses on markets organized as double auctions in which both buyers and sellers can submit bids and asks for standardized units of well-defined commodities and securities. It examines evidence from the laboratory and computer simulations.
| Author | : Emmanuel Morales-Camargo |
| Publisher | : |
| Total Pages | : 55 |
| Release | : 2012 |
| Genre | : |
| ISBN | : |
An experimental approach is used to compare bidding behavior and auction performance in uniform-price and discriminatory auctions when there is incomplete information concerning the common value of the auctioned good. In a symmetric information environment, the different auction formats provide the same average revenue. However, when information is asymmetric the discriminatory auction results in higher average revenue than the uniform-price auction. The volatility of revenue is higher in the uniform-price auctions in all treatments. The results, therefore, provide support for the use of the discriminatory format. Subject characteristics and measures of experience in recent auctions are found to be useful in explaining bidding behavior.
| Author | : Flavio M. Menezes |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 1994 |
| Genre | : Auctions |
| ISBN | : |
| Author | : Paul Milgrom |
| Publisher | : Cambridge University Press |
| Total Pages | : 378 |
| Release | : 2004-01-12 |
| Genre | : Business & Economics |
| ISBN | : 1139449168 |
This book provides a comprehensive introduction to modern auction theory and its important new applications. It is written by a leading economic theorist whose suggestions guided the creation of the new spectrum auction designs. Aimed at graduate students and professionals in economics, the book gives the most up-to-date treatments of both traditional theories of 'optimal auctions' and newer theories of multi-unit auctions and package auctions, and shows by example how these theories are used. The analysis explores the limitations of prominent older designs, such as the Vickrey auction design, and evaluates the practical responses to those limitations. It explores the tension between the traditional theory of auctions with a fixed set of bidders, in which the seller seeks to squeeze as much revenue as possible from the fixed set, and the theory of auctions with endogenous entry, in which bidder profits must be respected to encourage participation.
| Author | : James J. D. Wang |
| Publisher | : |
| Total Pages | : 280 |
| Release | : 1995 |
| Genre | : Bond market |
| ISBN | : |
| Author | : Andreas Hefti |
| Publisher | : |
| Total Pages | : |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
We study the effects of different information structures (full information, supply uncertainty and demand uncertainty) on equilibrium prices, allocative efficiency and bidding behavior in a (supply-side) uniform-price multi-unit auction, using supply function competition and a novel experimental design. Our setup integrates different types of market power and a varying level of competition. We empirically find that average prices tend to be higher under full information compared to the cases where bidders either have limited information about about the demand level or rivals' technologies or; the latter even leading to strictly lower average prices as the exertion of market power and bid shading is strongly reduced. We explain this finding with a behavioral equilibrium concept, where bidders behave as if competing against the average market situation. Further, we address the problem of multiplicity of equilibria by exploiting the equilibrium conditions to obtain an empirical selection of the average equilibrium supply function. The respective predictions of the average prices exceed those by standard OLS in all information treatments.
