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We consider duopoly competition under aggregate demand uncertainty, where firms
compete by choosing reserve prices and holding uniform-price auctions. Consumers observe
their valuation, but not the demand state, commit to a firm and participate in
its auction. Our model captures the features of several important markets involving
surge pricing during peak periods. If market demand is sufficiently elastic, then equilibrium
reserve prices do not bind. If market demand in the low state is sufficiently
inelastic, then at least one firm chooses a binding reserve price. We characterize the
linear demand case. We also show that more demand uncertainty softens competition.
