Uniform Price Auction

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Uniform Price Auction

A way to issue a security or commodity using the following steps. Potential buyers submit the quantity desired and a price per unit in sealed bids. When all bids are collected, the seller gives the desired quantity to the bidder who offered the highest price, then the second highest, and so forth, until all available units are sold. All buyers pay the price per unit of the lowest bid that was awarded units.

For example, suppose there are 100 available units and three bidders. Bidder A offers $45 per unit and wants 60 units; Bidder B wants 40 units at $60 per unit. Finally, Bidder C wants 30 units at $35 per unit. Under this scenario, Bidders A and B both receive their desired units and they both pay $45 per unit.
References in periodicals archive ?
Chemmanur and Liu (2006) analyze how an IPO firm selects an issue method between fixed price public offers and uniform price auctions when selling shares.
Sherman (2005) models book-building, discriminatory auctions, and uniform price auctions in an environment where the number of investors and the accuracy of the investors' information are endogenous.
They find that the French auction (the Mise en Vente) is superior to a fixed price public offer and the uniform price auction.
The experiments described address such topics as asymmetric information and bank lending, strategic default with social interactions, divisible-good uniform price auctions, dividends,
In Dutch auctions or uniform price auctions, successful bidders pay only the price of the lowest accepted bid rather than the actual price as in a conventional multiple-price auction.
Dutch auctions used with IPOs, which are also called uniform price auctions, work somewhat in the opposite direction.
Asymptotic properties of equilibria in discriminatory and uniform price auctions.
Next we consider a uniform price auction in which the price of each unit equals the lowest winning bid; this is the uniform-price auction recently used by the U.
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