(Paris School of Economics)
invited by Paul Belleflamme
will give a presentation on :
Abstract :
Large-scale procurement auctions with capacity constrained bidders have multiple winners with a split award. The split percentage is usually pre-specified. However, there are auctions, like renewable energy capacity creation auctions in India and Brazil, where the auctioneer does not specify the split, but asks the bidders to report their capacity before the auction. Thereafter, in an English auction, bidders compete on price, and the lowest price loser is given a residual quantity to clear the market, thereby splitting the award ex-post. The non-trivial BNE of the English auction under IPV assumption, for given quantity bids, is characterized by lesser competitiveness and a strictly positive probability of bidding the reserve by the bidder with the highest quantity. Such a BNE is unique with 2 players, but may not always exist with more players. The data from renewable energy auctions in India further provides some preliminary empirical evidence of bunching.