Characterization of bidding behavior in multi-unit auctions |
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Authors: | Luciano I de Castro Alvaro Riascos |
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Institution: | aUniversity of Illinois at Urbana-Champaign, 185 Wohlers Hall, 1206 S 6th Street, Champaign, IL 61820, USA;bUniversidad de los Andes, Facultad de Economía and CEDE, Carrera 1 No. 18A-70, Bloque C, Bogota D.C., Colombia |
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Abstract: | This paper considers a very general class of single or multi-unit auctions of indivisible objects. The model allows for interdependent values, multidiminensional types and any attitude towards risk. Assuming only optimal behavior, we prove that each bid is chosen in order to equalize the marginal benefit to the marginal cost of bidding. This generalizes many existing results in the literature. We use this characterization to obtain sufficient conditions for truthful bidding, monotonic best reply strategies and identification results for multi-unit auctions. |
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Keywords: | Multi-unit auctions First-order conditions Truth-telling Identification Monotonic best-reply |
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