Abstract
Abstract We study the supply function auction for an asymmetric oligopoly with uncertain linear demand function and linear marginal cost functions of producers. We examine existence of a supply function equilibrium (SFE) in the model and convergence of the best response dynamics to this equilibrium. We show that the dynamics converges to the SFE for a duopoly, but in general the SFE and the strong best response do not exist in the model.
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