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Budget constraints in homogenous multi-unit auctions

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Abstract

A homogenous multi-unit auction model is studied in two conditions: One is that the bidders face budget constraints and another is that the bidders do not face budget constraints. Two equilibrium bidding strategies of each bidder are presented in these two conditions. By comparing them, the authors show that the equilibrium unit price bid in the presence of budget constraints will be less than that in the absence of budget constraints. The difference between the two equilibrium bids leads to the reduced revenue of the seller. And this difference will decrease as the number of the bidders increases.

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Authors and Affiliations

  1. College of Information Science and Technology, Beijing University of Chemical Technology, Beijing, 100029, China

    Yaqiong Wu

  2. Institute of Systems Engineering, Department of Control Science and Engineering, Huazhong University of Science and Technology, Wuhan, 430074, China

    Yaqiong Wu, Yong Zhao, Chaoyuan Yue & Xianglin Wu

Authors
  1. Yaqiong Wu
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  2. Yong Zhao
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  3. Chaoyuan Yue
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  4. Xianglin Wu
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Corresponding author

Correspondence to Yaqiong Wu.

Additional information

This research is supported by the National Natural Science Foundation of China under Grant No. 70771041 and the Scientific Research Foundation for the Returned Overseas Chinese Scholars from State Education Ministry.

This paper was recommended for publication by Editor Shouyang WANG.

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Wu, Y., Zhao, Y., Yue, C. et al. Budget constraints in homogenous multi-unit auctions. J Syst Sci Complex 25, 549–555 (2012). https://doi.org/10.1007/s11424-012-9301-7

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  • DOI: https://doi.org/10.1007/s11424-012-9301-7

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