TY - JOUR
T1 - When less (potential demand) is more (revenue)
T2 - Asymmetric bidding capacities in divisible good auctions
AU - Sade, Orly
AU - Schnitzlein, Charles
AU - Zender, Jaime F.
PY - 2006/9
Y1 - 2006/9
N2 - We show that asymmetry in bidders' capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit auctions in which the final value of the good is common knowledge. This effect appears to be related to the increased difficulty of coordination when there are significant differences between bidders. Due to its impact on collusive outcomes, asymmetry in bidding capacities has a more powerful impact on the seller's revenue than does the auction type. Consistent with the finding in Sade et al. (2006) that the discriminatory auction is more susceptible to collusion than the uniform-price auction, asymmetry in capacity constraints has a greater impact in discriminatory auctions.
AB - We show that asymmetry in bidders' capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit auctions in which the final value of the good is common knowledge. This effect appears to be related to the increased difficulty of coordination when there are significant differences between bidders. Due to its impact on collusive outcomes, asymmetry in bidding capacities has a more powerful impact on the seller's revenue than does the auction type. Consistent with the finding in Sade et al. (2006) that the discriminatory auction is more susceptible to collusion than the uniform-price auction, asymmetry in capacity constraints has a greater impact in discriminatory auctions.
UR - http://www.scopus.com/inward/record.url?scp=33750320096&partnerID=8YFLogxK
U2 - 10.1007/s10679-006-9003-x
DO - 10.1007/s10679-006-9003-x
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AN - SCOPUS:33750320096
SN - 1572-3097
VL - 10
SP - 389
EP - 416
JO - Review of Finance
JF - Review of Finance
IS - 3
ER -
