Characterization of Pure Strategy Equilibria in Uniform Price IPO Auctions

The focus for the Centre is research into individual and strategic decision-making using a combination of theoretical and experimental methods. On the theory side, members of the Centre investigate individual choice under uncertainty, cooperative and non-cooperative game theory, as well as theories of psychology, bounded rationality and evolutionary game theory. Members of the Centre have applied experimental methods in the fields of Public Economics, Individual Choice under Risk and Uncertainty, Strategic Interaction, and the performance of auctions, Markets and other economic institutions. Much of the Centre's research involves collaborative projects with researchers from other departments in the UK and overseas. Abstract We characterize pure strategy equilibria of common value multi-unit uniform price auctions under the framework of initial public offerings, where bidders have incomplete private information regarding the value of shares and submit discrete demand schedules. We show that there exists a continuum of equilibria where investors with a higher expectation about the value of shares bid for higher quantities at higher prices, and as a result the market price increases with the market value. The collusive equilibria, in which investors place bids regardless of their expectation about the value, are obtained under stricter conditions than in the continuous price case.