Asymmetric Nash equilibrium in emission rights auctions |
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| Authors: | Congjun Rao Yong Zhao Chuanfeng Li |
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| Institution: | 1. School of Management, Huazhong University of Science and Technology, Wuhan 430074, PR China;2. College of Mathematics and computer Science, Huanggang Normal University, Huanggang 438000, PR China;3. Institute of Systems Engineering, Huazhong University of Science and Technology, Wuhan 430074, PR China;4. Department of Computer and Information Engineering, Luoyang Institute of Science and Technology, Luoyang, 471003, PR China |
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| Abstract: | This paper studies the problems of emission rights auctions, and presents a uniform price auction mechanism based on three assumptions, i.e., all buyers are asymmetric, every buyer submits a nonincreasing continuous demand function, and every buyer's valuation to per unit of the emission rights is common value information. It focuses on solving the asymmetric Nash equilibrium for this auction mechanism. It concludes that there exist multiple Nash equilibria in our auction mechanism, but the arbitrary low equilibrium prices cannot emerge. We also give several suggestions on how to induce the auction to a desired ideal equilibrium state in mechanism design of emission rights auctions. |
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