Marek Pycia: Auctions of Homogeneous Goods: A Case for Pay-as-Bid
The pay-as-bid (or discriminatory) auction is a prominent format for selling homogenous goods such as treasury securities and commodities. We prove the uniqueness of its pure-strategy Bayesian Nash equilibrium and establish a tractable representation of equilibrium bids. Building on these results we analyse the optimal design of pay-as- bid auctions, as well as uniform-price auctions (the main alternative auction format) allowing for asymmetric information. We show that supply transparency and full dis- closure are optimal in pay-as-bid, though not necessarily in uniform-price; pay-as-bid is revenue dominant and might be welfare dominant; and, under assumptions commonly imposed in empirical work, the two formats are revenue and welfare equivalent.
Date: 19 November 2021, 15:15 (Friday, 6th week, Michaelmas 2021)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room A or Join online https://zoom.us/j/91802954429?pwd=ZzNyeEcvL3JjN2NPVWZHVG9hcmR1UT09
Speaker: Marek Pycia (University of Zurich)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Emma Heritage