A review of multiunit auctions with homogeneous goods

Abstract

This article provides a comprehensive survey of the literature on multiunit auctions with multiple homogeneous goods. Despite the importance of multiunit auctions, the research on these auctions attracted substantially less attention than single‐unit auctions. We start by providing a review of the theoretical literature on homogeneous good multiunit auctions where bidders have multiunit demands. The articles are categorized based on their models' assumptions regarding bidders' values and the type of auction. Furthermore, we review the empirical and experimental evidence related to these multiunit auctions to understand the relationship with the theoretical findings.

An Investigation of Auctions in the Regional Greenhouse Gas Initiative

“…The uniform-price auction is the most commonly used auction format in cap-and-trade markets due to its desirable features such as price discovery and simplicity of rules (Khezr and MacKenzie, 2018b). However, it is well-established in the literature that this type of auction does not result in truthful bidding, as bidders are incentivized to under-report their true values (Back and Zender, 1993;Ausubel et al, 2014;Khezr and Cumpston, 2022). This issue is referred to as demand reduction (Ausubel et al, 2014).…”

“…Traditionally, approaches used to address this issue involve implementing price caps on permits or establishing reserve supply mechanisms to regulate price fluctuations(Murray et al, 2009;Fell et al, 2012;Kollenberg and Taschini, 2016).4 There are papers that empirically investigate other aspects of RGGI. For instance, seeFell and Maniloff (2018) andChan and Morrow (2019).5 SeeKhezr and Cumpston (2022) for a comprehensive review of these studies.…”

Strategy and design of multi‐unit auction in grouped asymmetric setting

“…Khezr and MacKenzie (2018) examine models where the quantity supplied depends on submitted bids and the seller precommits to an increasing supply function in UPA. However, the ranking of the auction results remains controversial (Baisa & Burkett, 2018;Khezr & Cumpston, 2021).…”