Designing multi-unit multiple bid auctions: An agent-based computational model of uniform, discriminatory and generalized Vickrey auctions

Multi-unit auctions are being employed by public agencies to allocate resources and to purchase services. These auctions resolve the lumpy bid problem inherent in single-unit auctions by allowing bidders to submit a supply or demand schedule. However, the choice of pricing formats for multi-unit auctions is controversial. Neither economic theory nor laboratory experiments depict a complete picture of how alternative pricing formats perform in terms of budgetary outcomes or allocative efficiency. This paper constructs an agent-based computational model to compare uniform, discriminatory and generalized Vickrey formats under different degrees of competition and heterogeneity in the bidder population.