Budget constraints and demand reduction in simultaneous ascending-bid auctions


Journal Article

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. © 2008 Blackwell Publishing Ltd.

Full Text

Duke Authors

Cited Authors

  • Brusco, S; Lopomo, G

Published Date

  • March 1, 2008

Published In

Volume / Issue

  • 56 / 1

Start / End Page

  • 113 - 142

Electronic International Standard Serial Number (EISSN)

  • 1467-6451

International Standard Serial Number (ISSN)

  • 0022-1821

Digital Object Identifier (DOI)

  • 10.1111/j.1467-6451.2008.00335.x

Citation Source

  • Scopus