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http://hdl.handle.net/2451/26193
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| Title: | Simultaneous Ascending Bid Auctions with Budget Constraints |
| Authors: | Brusco, Sandro
Lopomo, Giuseppe |
| Keywords: | Auctions
Multiple Objects
Collusion |
| Issue Date: | Aug-2002 |
| Series/Report no.: | EC-02-14 |
| Abstract: | We identify and analyze three distinct effects arising from potentially
binding budget constraints in multi-unit ascending auctions. First,
binding budgets clearly reduce the level of competition among bidders.
Second, budget constraints may at the same time make it difficult to
sustain collusive equilibria when bidders lack sufficient resources to
‘punish’ defectors. Third, the mere possibility, even if
arbitrarily small, of binding budget constraints can reduce competition
substantially because bidders can ‘pretend’ to be
constrained, even if they are not. In this cases, measures restricting
the participation of low-budget bidders, e.g. reserve prices, can
increase social welfare. |
| URI: | http://hdl.handle.net/2451/26193 |
| Appears in Collections: | Economics Working Papers
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