Abstract: We study the Uniform Price Auction, one of the standard sealed-bid multi-unit auction formats in Auction Theory, for selling multiple identical units of a single good to multi-demand bidders. Contrary to the truthful and efficient multi-unit Vickrey auction, the Uniform Price Auction encourages strategic bidding and is generally inefficient, due to a "Demand Reduction" effect; bidders tend to bid for fewer (identical) units, so as to receive them at a lower uniform price. All the same, the uniform pricing rule is popular by its appeal to the an...
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Topics: 
Mathematical economics
Microeconomics