Efficiency and information aggregation in large uniform-price auctions |
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Authors: | Aaron Bodoh-Creed |
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Institution: | Haas School of Business, University of California at Berkeley, Berkeley, CA 94720, USA |
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Abstract: | We prove that the equilibria of a large interdependent-value, uniform-price auction model where bidders have arbitrary preferences for multiple units can be approximated by a nonatomic exchange economy. We show that the uniform-price auction is approximately efficient with a large number of participants and asymptotically aggregates idiosyncratic bidder information into the market price. More generally our analysis framework provides conditions justifying the use of nonatomic limit model approximations to analyze the large-market behavior of game-theoretic models. We demonstrate continuity requirements on the economic primitives sufficient for the equilibrium strategies of the two models to converge as the number of participants in the finite game approaches infinity. |
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Keywords: | D44 D82 D61 |
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