Multi-stage sequential uniform price auction mechanism for divisible goods

In this paper, we study the problem of auctioning a kind of continuous homogeneous divisible goods, and present a multi-stage sequential auction mechanism of divisible goods under uniform price. In this mechanism, the auction process is divided into multiple stages, all bidders satisfy the sequential rationality conditions, all bidders are asymmetric, every bidder is allowed to submit a nonincreasing continuous demand function in each round bidding, every bidder’s valuation to per unit of the goods is independent private information, and if a bidder does not obtain the quantity he wants in former stage auction, he still have another opportunity to obtain some quantity in the later stage auction. For this mechanism, we explore the formation process and composition of equilibrium points in each stage auction, and discuss the optimal strategy selection for bidders, then give the detail steps and an application example to show how to implement this multi-stage sequential auction mechanism. The conclusions can be drawn that our auction mechanism is an efficient incentive mechanism, and can effectively reduce many underpricing equilibrium and can yield higher expected income than a single uniform price auction for the auctioneer. It also can avoid the occurrence of failure auction (equilibrium does not exist), and effectively extend and improve the traditional single stage uniform price auction mechanism.