Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/118061 
Year of Publication: 
2003
Series/Report no.: 
Nota di Lavoro No. 22.2003
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
Uniform-price auctions of a divisible good in fixed supply admit underpricing equilibria, where bidders submit high inframarginal bids to prevent competition on prices. The seller can obstruct this behavior by tilting her supply schedule and making the amount of divisible good on offer change endogenously with its (uniform) price. Precommitting to an increasing supply curve is a strategic instrument to reward aggressive bidding and enhance expected revenue. A fixed supply may not be optimal even when accounting for the cost to the seller of issuing a quantity different from her target supply.
Subjects: 
Uniform-price auction
divisible good
strategic role of the seller
endogenous supply
Treasury and IPO auctions
JEL: 
D44
E58
Document Type: 
Working Paper

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