Lowest-Unmatched Price Auctions

Eichberger, J. and Vinogradov, D. (2015) Lowest-Unmatched Price Auctions. International Journal of Industrial Organization, 43, pp. 1-17. (doi: 10.1016/j.ijindorg.2015.07.004)

147276.pdf - Accepted Version



Lowest-Unmatched Price Auctions (LUPAs) specify that the lowest bid placed by only one participant wins. They are used in internet trading and TV and radio shows. We model LUPAs as games with minimal restrictions, in particular allowing players to place more than one bid, since multiple bids have been observed in most actual LUPAs. Though LUPAs are games for which a closed-form solution does not seem to exist in general, our model generates several testable implications about the type of strategies played in equilibrium and the highest bid in a given LUPA. Our analysis suggests that players follow strategic considerations and arrive at decisions which, at least in the aggregate, are generally consistent with theoretical predictions, yet there are some remarkable deviations.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Vinogradov, Professor Dmitri
Authors: Eichberger, J., and Vinogradov, D.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:International Journal of Industrial Organization
ISSN (Online):0167-7187
Published Online:29 July 2015
Copyright Holders:Copyright © 2015 Elsevier B.V.
First Published:First published in International Journal of Industrial Organization 43:1-17
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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