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Auctions with Variable Supply: Uniform Price versus Discriminatory

Damianov, D.S.; Becker, J.G.


J.G. Becker


We examine an auction in which the seller determines the supply after observing the bids. We compare the uniform price and the discriminatory auction in a setting of supply uncertainty, where uncertainty is caused by the interplay of two factors: the seller's private information about marginal cost and the seller's incentive to sell the profit-maximizing quantity, given the received bids. In every symmetric mixed strategy equilibrium, bidders submit higher bids in the uniform price auction than in the discriminatory auction. In the two-bidder case, this result extends to the set of rationalizable strategies. As a consequence, we find that the uniform price auction generates a higher expected revenue for the seller and a higher trade volume.


Damianov, D., & Becker, J. (2010). Auctions with Variable Supply: Uniform Price versus Discriminatory. European Economic Review, 54(4), 571-593.

Journal Article Type Article
Publication Date 2010-05
Deposit Date Aug 27, 2013
Journal European Economic Review
Print ISSN 0014-2921
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 54
Issue 4
Pages 571-593
Keywords Sealed bid multi-unit auctions; Variable supply auctions; Discriminatory and uniform price auctions;Subgame perfect equilibria; Rationalizable strategies
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