Abstract: Menezes and Monteiro, Math. Soc. Sci. (1995), show that a multiunit
discriminatory price auction does not have a pure strategy equilibrium
unless one imposes some rather special conditions on the demand
functions. This nonexistence result might indicate a problem either
wirh the underlying auction procedure (as Menezes and Monteiro
suggest) or with the modelling approach (as we suggest). We observe
that the nonexistence problem disappears if bids must come in
multiples of smallest units  a realistic feature. Moreover, we show
that most of the analysis can be recast in a discrete action model.
Keywords: Discriminatory price auction, mixed strategies, existence of equilibrium, integer constraints
Full paper (231 KB PDF)
 Full paper (241 KB Postscript)
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Last update: March 3, 1998
