ENGINEERING SCIENCE SEMINAR: Par Holmberg Event as iCalendar

09 December 2015

3pm

Venue: Room 201

Location: 70 Symonds Street

Contact info: Andy Philpott

Contact email: a.philpott@auckland.ac.nz

This week:

 

PRO-COMPETIVE RATIONING IN MULTI-UNIT ACTIONS

PAR HOLMBERG
IFN, Stockholm

In multi-unit auctions, such as auctions of commodities and securities, it is necessary to specify rationing rules to break ties between multiple marginal bids. The standard approach in the literature and in practice is to ration marginal bids proportionally. This paper shows how bidding can be made more competitive - and the auctioneer can increase its surplus - if the rationing rule instead gives increasing priority to bidders with a small volume of marginal bids at clearing prices closer to the reservation price. In comparison to standard rationing, such a rule can for bene…cial circumstances have almost the same e¤ect on the competitiveness of bids as a doubling of the number of bidders.