Budget Constraints and Demand Reduction in Simultaneous Ascending-Bid Auctions

Download or read book Budget Constraints and Demand Reduction in Simultaneous Ascending-Bid Auctions written by Sandro Brusco and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The possibility, even if arbitrarily small, of binding budget constraints in simultaneous ascending bid auctions induces strategic demand reduction and generates significant inefficiencies. Under mild conditions on the distributions of the bidders' values, unconstrained bidders behave as if they were liquidity constrained, even as the probability that bidders are budget constrained goes to zero.