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Quantitative Finance · Glossary

What is Pay-as-bid and discriminatory auctions?

Also known as: pay-as-bid auction · discriminatory auction

Definition 29.9 Quantitative Methods · Chapter 29 — Games, Auctions and Information

A pay-as-bid auction, or discriminatory auction, sells several units to the highest bids, each winner paying its own bid; it is the multi-unit first-price auction, as the uniform-price auction of Book 2 is the multi-unit second-price auction.

Distribution of revenue in 400 000 simulated auctions of two units to five unit-demand bidders with uniform private values, under the uniform-price and pay-as-bid formats in equilibrium: the same mean, 1, and very different spreads. Data: the chapter’s tutorial.
Figure 29.3. Distribution of revenue in 400 000 simulated auctions of two units to five unit-demand bidders with uniform private values, under the uniform-price and pay-as-bid formats in equilibrium: the same mean, 1, and very different spreads. Data: the chapter’s tutorial.
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