Download or read book Multi-unit Auctions with Budget-constrained Bidders written by Gagan Pratap Ghosh and published by . This book was released on 2012 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: I derive various qualitative features of this equilibrium, among which are: (1) under mild assumptions, there always exist bidder-types who submit unequal bids in equilibrium, (2) the equilibrium is monotonic in the sense that bidders with higher valuations prefer more unequal splits of their budgets than bidders with lower valuations and the same budget-level. With a formal theory in place, I carry out a quantitative exercise, using data from the 1970 OCS auction. I show that the model is able to match many aspects of the data. (1) In the data, the number of tracts bidders submit bids on is positively correlated with budgets (an R2 of 0.84), even though this relationship is non-monotonic; my model is able to capture this non-monotonicity, while producing an R2 of 0.89 (2) In the data, the average number of bids per tract is 8.21; for the model, this number is 10.09. (3) Auction revenue in the data was $1.927 billion; the model produced a mean revenue of $1.944 billion.