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On the strictly descending multi-unit auction |
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| Affiliation: | 1. TWS Partners AG, Widenmayerstr. 38, 80538 Munich, Germany;2. Düsseldorf Institute for Competition Economics, University of Düsseldorf, Universitätsstraße 1, 40225, Düsseldorf, Germany;3. University of Cologne, Albertus-Magnus-Platz, 50923 Cologne, Germany;1. University of La Rochelle, France;2. University of York, United Kingdom;1. Department of Economics and CIREQ, University of Montreal, P.O. Box 6128, Station Downtown, Montreal QC H3C 3J7, Canada;2. Department of Quantitative Economics, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands;1. Research Institute for Economics and Business Administration, Kobe University, Japan;2. Department of Economics, University of Vienna, Austria |
| Abstract: | We analyze the bidding behavior in a strictly descending multi-unit auction where the price decreases continuously without going back to the initial start price once an object is sold. We prove that any equilibrium in the multi-unit descending auction is inefficient. We derive a symmetric equilibrium for general distribution functions as well as an arbitrary number of bidders and objects. Moreover, equilibrium bidding is characterized by a set of initial value problems. Our analysis thus generalizes previous results in the literature. |
| Keywords: | Discriminatory descending auction Dutch auction First-price sealed-bid auction Multi-unit auction |
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