Theoretical economic analysis demonstrates asymptotic efficiency in multi-unit discriminatory auctions, indicating that market size overcomes asymmetric bidding inefficiencies.
We consider discriminatory auctions for multiple identical units of a good. Players have private values, possibly for multiple units. None of the usual assumptions about symmetry of players' distributions over values or symmetry of equilibrium play are made. Because of this, equilibria will typically involve inefficient allocations. Equilibria also become very difficult to solve for. Using an approach which does not depend on explicit equilibrium calculations we show that such auctions become arbitrarily close to efficient as the number of players, and possibly the number of objects, grows large, and provide a simple characterization of limit equilibria.
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Jeroen M. Swinkels (1999) studied this question.
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