Bidder Behavior in Multi-Unit Ascending Auctions : Evidence from Cross-Border Capacity Auctions

We analyse a unique data set on multi-unit ascending auctions,which contains the whole dynamic of bidders' behavior in the IFAauctionsselling the right to use the electric transmission capacity betweenFrance and England. First, we document that daily auctionssuer from a great extent of underpricing and that the winning priceand the award concentration are varying a lot across time periods.Second, we fail to explain this evidence by winner's curse-driven arguments.The time periods, which are proxying for small changes inthe bidding rules, seem to play a signicant role in the extent of underpricing.Our empirical ndings are consistent with the view thatdaily multi-unit ascending auctions among a small number of potentialbidders allow a large panel of outcomes, in particular very collusiveones.