Download or read book Simultaneous Ascending Bid Auctions with Budget Constraints written by Sandro Brusco and published by . This book was released on 2008 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: We identify and analyze three distinct effects arising from potentially binding budget constraints in multi-unit ascending auctions. First, binding budgets clearly reduce the level of competition among bidders. Second, budget constraints may at the same time make it difficult to sustain collusive equilibria when bidders lack sufficient resources to punish defectors.Third, the mere possibility, even if arbitrarily small, of binding budget constraints can reduce competition substantially because bidders can pretend to be constrained, even if they are not.In this cases, measures restricting the participation of low-budget bidders, e.g. reserve prices, can increase social welfare.