Revenue and efficiency in multi-unit uniform-price auctions

Recently both the range and the value of objects sold by auction have grown tremendously. An auction is an exchange mechanism with asymmetric information. Auctions are so popular because when the seller is unsure about the value that bidders assign to the sold objects, one possible way to reveal the bidder who is willing to pay the highest price for the object is to apply an appropriate auction mechanism. An auction can be treated as a game in which the seller offers one or more units to the auction participants. The seller does not know the bidder's value of any particular unit, but he can set up an explicit set of institutional rules determining unit allocation and prices on the basis of bids submitted by the auction participants. A common seller's goal when designing the auction is to maximize the revenue. In single-unit auctions when the seller has some value for the auctioned object, it is optimal from the seller's revenue point of view to set the reserve price above the seller's value. The seller who sets such a reserve price faces a loss when no bidder is winning the object. But this loss is offset by a higher average price when the object is sold in the auction in either the first-price or the second-price auction..