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Title:Characterization of pure strategy equilibria in uniform price IPO auctions PDF Logo
Authors:Zhang, Ping
Issue Date:2009
Series/Report no.:CeDEx discussion paper series 2009-05
Abstract:We characterize pure strategy equilibria of common value multi-unit uniform price auctions under the framework of initial public offerings, where bidders have incomplete private information regarding the value of shares and submit discrete demand schedules. We show that there exists a continuum of equilibria where investors with a higher expectation about the value of shares bid for higher quantities at higher prices, and as a result the market price increases with the market value. The collusive equilibria, in which investors place bids regardless of their expectation about the value, are obtained under stricter conditions than in the continuous price case.
Subjects:IPO, uniform price auction
divisible goods auction
share auction
tacit collusion
JEL:D44
G12
D82
Document Type:Working Paper
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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