Revenue Equivalence and Bidding Behavior in a Multi-Unit Auction Market: An Empirical Analysis
The Review of Economics and Statistics
1993
Revenue-equivalence of competitive and discriminatory formats is a major result for private-value multiunit auctions with risk-neutral bidders. Among the factors that may cause this result to break down, the most notorious ones are risk-aversion, value-affiliation, and endogenous bidder participation. Using data from competitive and discriminatory auctions undertaken in the Zambian foreign exchange market, the author analyzes revenue-equivalence and other bidding phenomena. The results indicate that (1) competitive auctions were revenue-superior due to higher participation; (2) high bidders adjusted with delay to an auction format change; and (3) a reservation bid was used as a policy instrument. Copyright 1993 by MIT Press.
- DOI
- 10.2307/2109436
- Volume
- 75 (2)
- Pages
- 302
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- crossref openalex