Working Paper Series
Edward J. Anderson, Pär Holmberg
Mixed Strategies in Discriminatory Divisible-good Auctions
() and Andrew B. Philpott
Abstract: Author: Edward J. Anderson, Pär Holmberg and Andrew B.
Philpott Keywords: Pay-as-bid Auction; Divisible Good Auction; Mixed
Strategy Equilibria; Wholesale Electricity Markets Pages: 71 Published:
November 24, 2009 JEL-codes: D43; D44; C72 Download Wp814.pdf (756 kB)
Abstract Using the concept of market-distribution functions, we derive
general optimality conditions for discriminatory divisible-good auctions,
which are also applicable to Bertrand games and non-linear pricing. We
introduce the concept of offer distribution function to analyze randomized
offer curves, and characterize mixed-strategy Nash equilibria for
pay-as-bid auctions where demand is uncertain and costs are common
knowledge; a setting for which pure-strategy supply function equilibria
typically do not exist. We generalize previous results on mixtures over
horizontal offers as in Bertrand-Edgeworth games, but more importantly we
characterize novel mixtures over partly increasing supply functions.
Keywords: Pay-as-bid Auction; Divisible Good Auction; Mixed Strategy Equilibria; Wholesale Electricity Markets; (follow links to similar papers)
JEL-Codes: C72; D43; D44; (follow links to similar papers)
71 pages, November 24, 2009
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Full text versions of the paper:
- This paper is published as:
Anderson, Edward J., Pär Holmberg and Andrew B. Philpott, (2013), 'Mixed Strategies in Discriminatory Divisible-good Auctions', Rand Journal of Economics, Vol. 44, No. 1, pages 1-32
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