IEOR-DRO Seminar: Xavier Vives (IESE)

October 18, 2016 | 1:10pm - 2:00pm

IEOR-DRO Seminar: Xavier Vives (IESE)

Uris Hall Room 142
We analyze a divisible good uniform-price auction that features two groups each with a finite number of identical bidders. Equilibrium is unique, and the relative market power of a group increases with the precision of its private information but declines with its transaction costs. In line with empirical evidence, we find that an increase in transaction costs and/or a decrease in the precision of a bidding group’s information induces a strategic response from the other group, which thereafter attenuates its response to both private information and prices. A "stronger" bidding group -which has more precise private information, faces lower transaction costs, and is more oligopsonistic- has more market power and so will behave competitively only if it receives a higher per capita subsidy rate.


500 W. 120th St., Mudd 315, New York, NY 10027    212-854-2942                 
©2014 Columbia University