Bidding in Multi-Unit Auctions under Limited Information
Theoretical Economics
2023-05-02 v2
Abstract
We study multi-unit auctions in which bidders have limited knowledge of opponent strategies and values. We characterize optimal prior-free bids; these bids minimize the maximal loss in expected utility resulting from uncertainty surrounding opponent behavior. Optimal bids are readily computable despite bidders having multi-dimensional private information, and in certain cases admit closed-form solutions. In the pay-as-bid auction the minimax-loss bid is unique; in the uniform-price auction the minimax-loss bid is unique if the bidder is allowed to determine the quantities for which they bid, as in many practical applications. We compare minimax-loss bids and auction outcomes across auction formats, and derive testable predictions.
Keywords
Cite
@article{arxiv.2112.11320,
title = {Bidding in Multi-Unit Auctions under Limited Information},
author = {Bernhard Kasberger and Kyle Woodward},
journal= {arXiv preprint arXiv:2112.11320},
year = {2023}
}