Revenue and Efficiency in Uniform-Price Private Value Auctions By Michal Bresky∗ This paper shows that in a private value multi-unit uniform-price auction, the reservation price increases both the efficiency and revenue. In equilibrium the difference between the true value of a unit and the submitted bid is different for each unit; therefore, the seller cannot allocate units efficiently. When the seller increases the reservation price, the bidders increase their bids on the units with a larger difference between the value and bid more. Some bidders with a low value do not participate in the auction. Therefore the units are allocated among those with high initial and subsequent values that is efficient. For a low range of reservation prices is, the higher the reservation price the higher the expected efficiency and revenue. Keywords: multi-unit auction, multiple-object auction, market efÞciency, optimal selling mechanism, discriminatory and uniform price independent-private value auction with reservation price. JEL ClassiÞcation D44.
∗
I would like to thank Philip Reny, Avner Shaked, Viatcheslav Vinogradov, Michal
Kejak and Jan Hanousek for their helpful comments. I would appreciate any comments that you can sent to
[email protected].
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