arXiv Open Access 2023

Nash equilibria of the pay-as-bid auction with K-Lipschitz supply functions

Martina Vanelli Giacomo Como Fabio Fagnani

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Abstrak

We model a system of n asymmetric firms selling a homogeneous good in a common market through a pay-as-bid auction. Every producer chooses as its strategy a supply function returning the quantity S(p) that it is willing to sell at a minimum unit price p. The market clears at the price at which the aggregate demand intersects the total supply and firms are paid the bid prices. We study a game theoretic model of competition among such firms and focus on its equilibria (Supply function equilibrium). The game we consider is a generalization of both models where firms can either set a fixed quantity (Cournot model) or set a fixed price (Bertrand model). Our main result is to prove existence and provide a characterization of (pure strategy) Nash equilibria in the space of K-Lipschitz supply functions.

Topik & Kata Kunci

eess.SY cs.MA cs.SI math.OC

Penulis (3)

Martina Vanelli

Giacomo Como

Fabio Fagnani

Format Sitasi

APA MLA BibTeX

Vanelli, M., Como, G., Fagnani, F. (2023). Nash equilibria of the pay-as-bid auction with K-Lipschitz supply functions. https://arxiv.org/abs/2306.07663

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Informasi Jurnal

Tahun Terbit: 2023
Bahasa: en
Sumber Database: arXiv
Akses: Open Access ✓