Pro‐competitive Rationing in Multi‐unit Auctions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn multi-unit auctions, such as auctions of commodities and securities, and …nancial exchanges, it is necessary to specify rationing rules to break ties between multiple marginal bids. The standard approach in the literature and in practice is to ration marginal bids proportionally. This paper shows how bidding can be made more competitive if the rationing rule instead gives increasing priority to bidders with a small volume of marginal bids at clearing prices closer to the reservation price. In comparison to standard rationing, such a rule can have almost the same e¤ect on the competitiveness of bids as a doubling of the number of bidders.

Auction Format and Auction Sequence in Multi‐item Multi‐unit Auctions: An Experimental Study

“… In this issue, Ausubel and Baranov () as well as Cramton and Ockenfels () deal with auctions of multiple items with multiple units that also allow for complementarities (super‐additive values). Greve and Pollitt () consider auctions of multiple independent items, while Holmberg () studies auctions of multiple identical units of one item. …”

Comparing auction designs where suppliers have uncertain costs and uncertain pivotal status

“…The details of the rule does not influence our results, as long as the rationing rule is such that, whenever rationing is needed, any producer would get a significantly larger output, an increment bounded away from zero, if it reduced its offer price by any positive amount. As an example, the pro‐rata‐on‐the‐margin rule, which is a standard rationing rule in multiunit auctions (Kremer and Nyborg, ), would satisfy these properties, and so would the large class of disproportionate rationing rules that is considered by Holmberg ().…”