Low-revenue equilibria in simultaneous ascending-bid auctions

Richard Engelbrecht-Wiggans, Charles M. Kahn

Research output: Contribution to journalArticlepeer-review


Low-revenue equilibria allow participants in an auction to obtain goods at prices lower than would prevail in a competitive market. These outcomes are generated as perfect equilibria of ascending-bid, multiunit auctions. We show that these equilibria are possible under mild conditions-conditions that are likely to prevail in many situations where auction formats have recently been adopted. We argue that these equilibria could explain the low revenues of some recent auctions, and discuss potential remedies to eliminate low-revenue equilibria.

Original languageEnglish (US)
Pages (from-to)508-518
Number of pages11
JournalManagement Science
Issue number3
StatePublished - Mar 2005


  • Auctions
  • Bidding
  • Collusion

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Management Science and Operations Research


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