Online Auctions: a Survey of the Empirical Research
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Putting Auction Theory to Work
Putting Auction Theory to Work Paul Milgrom With a Foreword by Evan Kwerel © 2003 “In Paul Milgrom's hands, auction theory has become the great culmination of game theory and economics of information. Here elegant mathematics meets practical applications and yields deep insights into the general theory of markets. Milgrom's book will be the definitive reference in auction theory for decades to come.” —Roger Myerson, W.C.Norby Professor of Economics, University of Chicago “Market design is one of the most exciting developments in contemporary economics and game theory, and who can resist a master class from one of the giants of the field?” —Alvin Roth, George Gund Professor of Economics and Business, Harvard University “Paul Milgrom has had an enormous influence on the most important recent application of auction theory for the same reason you will want to read this book – clarity of thought and expression.” —Evan Kwerel, Federal Communications Commission, from the Foreword For Robert Wilson Foreword to Putting Auction Theory to Work Paul Milgrom has had an enormous influence on the most important recent application of auction theory for the same reason you will want to read this book – clarity of thought and expression. In August 1993, President Clinton signed legislation granting the Federal Communications Commission the authority to auction spectrum licenses and requiring it to begin the first auction within a year. With no prior auction experience and a tight deadline, the normal bureaucratic behavior would have been to adopt a “tried and true” auction design. But in 1993 there was no tried and true method appropriate for the circumstances – multiple licenses with potentially highly interdependent values. -
Internet Auctions and Virtual Malls
Internet Auctions and Virtual Malls Is this Booklet Right for You? If you are a small business owner looking for alternatives to creating your own e-commerce website and want to sell online, then you will find this booklet useful. Even if you already have your own website, you can use this booklet to learn more about where you can sell (or buy) products and services online (e.g. Internet Auctions). You can also consider virtual malls or e-mall services where your site is listed along with others. E-malls are discussed later in this booklet. What is an Internet Auction? Internet auctions bring people and/or businesses together on Examples of Auction Websites one website to buy and sell • www.uBid.com (general auction site). products and services. Buying and selling processes vary • www.eBay.com (general auction site). across auction sites; so make • www.alibaba.com (general auction site). sure you familiarize yourself with these techniques by • www.bidville.com (general auction site). visiting these websites. • www.liquidation.com (commercial surplus inventory and government surplus assets – a wide variety of product categories). Most auction sites act as hosts for other businesses or individuals. • www.dovebid.com (global provider of capital asset auction, Generally the host of the website valuation, redeployment, and management services). organizes the site, provides • www.elance.com (focuses on services. You can search for a service product information, displays provider by category or post your project and receive proposals the product and processes from service providers). payments online. A fee is charged Sources: Index of the web.com www.indexoftheweb.com/Shopping/Auctions.htm to list the product or service and/ www.emarketservices.com, http://www.e-bc.ca/pages/resources/internet-auctions.php or a commission is taken on each completed sale. -
Collusion and Equilibrium Selection in Auctions∗
Collusion and equilibrium selection in auctions∗ By Anthony M. Kwasnica† and Katerina Sherstyuk‡ Abstract We study bidder collusion and test the power of payoff dominance as an equi- librium selection principle in experimental multi-object ascending auctions. In these institutions low-price collusive equilibria exist along with competitive payoff-inferior equilibria. Achieving payoff-superior collusive outcomes requires complex strategies that, depending on the environment, may involve signaling, market splitting, and bid rotation. We provide the first systematic evidence of successful bidder collusion in such complex environments without communication. The results demonstrate that in repeated settings bidders are often able to coordinate on payoff superior outcomes, with the choice of collusive strategies varying systematically with the environment. Key words: multi-object auctions; experiments; multiple equilibria; coordination; tacit collusion 1 Introduction Auctions for timber, automobiles, oil drilling rights, and spectrum bandwidth are just a few examples of markets where multiple heterogeneous lots are offered for sale simultane- ously. In multi-object ascending auctions, the applied issue of collusion and the theoretical issue of equilibrium selection are closely linked. In these auctions, bidders can profit by splitting the markets. By acting as local monopsonists for a disjoint subset of the objects, the bidders lower the price they must pay. As opposed to the sealed bid auction, the ascending auction format provides bidders with the -
How Auctions Amplify House-Price Fluctuations
How Auctions Amplify House-Price Fluctuations Alina Arefeva∗ Wisconsin School of Business, University of Wisconsin-Madison Download current version at http://www.aarefeva.com/ First draft: May 29, 2015 This draft: June 12, 2019 Abstract I develop a dynamic search model of the housing market where house prices are deter- mined in auctions rather than by Nash bargaining as in the housing search model from the literature. The model with auctions generates fluctuations between booms and busts. Dur- ing the boom multiple buyers compete for one house, while in the bust buyers are choosing among several houses. The model improves on the performance of the model with Nash bargaining by producing highly volatile house prices which helps to solve the puzzle of ex- cess volatility of house prices. Higher volatility arises because of the competition between buyers with heterogeneous values. With heterogeneous valuations, the price determination becomes important for the quantitative properties of the model. With Nash bargaining, the buyer is chosen randomly among all interested buyers. Then the average of buyers' house values determines the house price. In the auction model, the buyer is chosen by the maximum bid among all interested buyers, so the highest value determines the house prices. During the boom, the highest values increase more than the average values, making the sales price more volatile. This high volatility is constrained efficient since the equilibrium in the model decentralizes the solution of the social planner problem, constrained by the search frictions. Keywords: housing, real estate, volatility, search and matching, pricing, liquidity, Nash bargaining, auctions, bidding wars JEL codes: E30, C78, D44, R21, E44, R31, D83 ∗I am grateful for the support and guidance of my advisors Robert Hall, Monika Piazzesi, Pablo Kurlat. -
Auction Theory Can Complement Competition Law: Preventing Collusion in Europe's 3G Spectrum Allocation
COMMENT AUCTION THEORY CAN COMPLEMENT COMPETITION LAW: PREVENTING COLLUSION IN EUROPE'S 3G SPECTRUM ALLOCATION OWEN M. KENDLER* 1. INTRODUCTION With the advent of wireless technology for personal and indi- vidualized communication,' radio frequencies have become valu- able property.2 European Union ("EU")3 member states will in- * J.D. Candidate 2002, University of Pennsylvania Law School; M.Sc. Eco- nomics 1999, University of Bristol; B.A. 1996, Washington University. The Author thanks Professor David Gerber of Kent College Law School and Alisa Greenstein of Paul, Weiss, Rifkind, Wharton & Garrison for their insightful comments. Ad- ditional thanks go to Professor Paul D. Klemperer of Nuffield College, Oxford University, for his help in locating key international materials. Jessica Miller of the Class of 2002 of the University of Pennsylvania Law School deserves special mention for all of her hard work in refining and improving this Comment 1 Although the popular press claims the current wireless revolution is a per- sonal communication revolution, radio spectrum in fact began its life as a medium for personal communication through ship-to-shore radio. See discussion infra note 18. The current wireless revolution reverts back to this two-way usage: the cur- rent revolution involves the targeting of wireless communications between two points and the ability for mass use of a narrow bandwidth by multiple users and services (e.g., voice, data, fax, and video). 2 Stephen Labaton, Clinton Orders a New Auction of the Airwaves, N.Y. TIMEs, Oct. 14, 2000, at Al. 3 The terminology used by European institutions is troublesome, because of changes in the name of Europe's confederation and the complexity of its founding and major treaties. -
Publishing Government Contracts Addressing Concerns and Easing Implementation
Publishing Government Contracts Addressing Concerns and Easing Implementation A Report of the Center for Global Development Working Group on Contract Publication Publishing Government Contracts Addressing Concerns and Easing Implementation A Report of the Center for Global Development Working Group on Contract Publication Publishing Government Contracts Addressing Concerns and Easing Implementation A Report of the Center for Global Development Working Group on Contract Publication © Center for Global Development. 2014. Some Rights Reserved. Creative Commons Attribution-NonCommercial 3.0 The Center for Global Development is grateful for contributions from the Omidyar Network and the UK Department for International Development in support of this work. Center for Global Development 2055 L Street NW, Fifth Floor Washington DC 20036 www.cgdev.org Contents Working Group on Contract Publication ................................................................v Preface ........................................................................................................................... vii Acknowledgements .....................................................................................................ix Summary and Recommendations of the Working Group ................................ix Benefits of Publication ........................................................................................................................ ix Addressing Concerns .......................................................................................................................... -
Plus Factors and Agreement in Antitrust Law†
Kovacic Final Type M.doc 11/17/2011 11:17 AM PLUS FACTORS AND AGREEMENT IN ANTITRUST LAW† William E. Kovacic* Robert C. Marshall** Leslie M. Marx*** Halbert L. White**** Plus factors are economic actions and outcomes, above and beyond paral- lel conduct by oligopolistic firms, that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action. Possible plus factors are typically enumerated without any attempt to dis- tinguish them in terms of a meaningful economic categorization or in terms of their probative strength for inferring collusion. In this Article, we provide a taxonomy for plus factors as well as a methodology for ranking plus factors in terms of their strength for inferring explicit collusion, the strongest of which are referred to as “super plus factors.” Table of Contents Introduction ...................................................................................... 394 I. Definition of Concerted Action in Antitrust Law....... 398 A. Doctrine Governing the Use of Circumstantial Evidence to Prove an Agreement ....................................... 399 B. Plaintiff’s Burden of Proof ................................................ 402 C. Interdependence and the Role of Plus Factors .................. 405 II. Agreements to Suppress Rivalry Assessed through the Reactions of Buyers ..................................................... 409 III. Taxonomy of Cartel Conduct ........................................... 413 † The authors are grateful to Charles Bates, Joe Harrington, -
Umi-Umd-1475.Pdf (1.983Mb)
ABSTRACT Title of Dissertation / Thesis: PERFORMANCE AND ANALYSIS OF SPOT TRUCK -LOAD PROCUREMENT MARKETS USING SEQUENTIAL AUCTIONS Miguel Andres Figliozzi, Ph.D., 2004 Dissertation / Thesis Directed By: Professor Hani Mahmassani, Civil and Env ironmental Engineering Department Competition in a transportation marketplace is studied under different supply/demand conditions, auction formats, and carriers’ behavioral assumptions. Carriers compete in a spot truck -load procurement market (TLPM) using sequential auctions. Carrier participation in a TLPM requires the ongoing solution of two distinct problems: profit maximization problem (chose best bid) and fleet management problem (best fleet assignment to serve acquired shipments). Sequential aucti ons are used to model an ongoing transportation market, where carrier competition is used to study carriers’ dynamic vehicle routing technologies and decision making processes. Given the complexity of the bidding/fleet management problem, carriers can tack le it with different levels of sophistication. Carriers’ decision making processes and rationality/bounded rationality assumptions are analyzed. A framework to study carrier behavior in TL sequential auctions is presented. Carriers’ behavior is analyzed as a function of fleet management technology, auction format, carrier bounded rationality, market settings, and decision making complexity. The effects of fleet management technology asymmetries on a competitive marketplace are studied. A methodology to com pare dynamic fleet management technologies -
Sustainable and Unchallenged Algorithmic Tacit Collusion
Northwestern Journal of Technology and Intellectual Property Volume 17 Issue 2 Article 2 3-2020 SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION Ariel Ezrachi Oxford University Centre for Competition Law and Policy Maurice E. Stucke University of Tennessee College of Law Follow this and additional works at: https://scholarlycommons.law.northwestern.edu/njtip Recommended Citation Ariel Ezrachi and Maurice E. Stucke, SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION, 17 NW. J. TECH. & INTELL. PROP. 217 (2020). https://scholarlycommons.law.northwestern.edu/njtip/vol17/iss2/2 This Article is brought to you for free and open access by Northwestern Pritzker School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of Technology and Intellectual Property by an authorized editor of Northwestern Pritzker School of Law Scholarly Commons. SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION Cover Page Footnote We are grateful for comments received from participants in the 2017 Organization for Economic Cooperation and Development [OECD] roundtable on “Algorithms and Collusion” and the 2018 Max Planck Round Table Discussion on Tacit Collusion. This article is available in Northwestern Journal of Technology and Intellectual Property: https://scholarlycommons.law.northwestern.edu/njtip/vol17/iss2/2 NORTHWESTERN JOURNAL OF TECHNOLOGY AND INTELLECTUAL PROPERTY SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION Ariel Ezrachi & Maurice E. Stucke March 2020 VOL. 17, NO. 2 © 2020 by Ariel Ezrachi & Maurice E. Stucke Copyright 2020 by Ariel Ezrachi & Maurice E. Stucke Volume 17, Number 2 (2020) Northwestern Journal of Technology and Intellectual Property SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION Ariel Ezrachi* & Maurice E. Stucke** ABSTRACT—Algorithmic collusion has the potential to transform future markets, leading to higher prices and consumer harm. -
The Ability of Dutch Foreclosure Auctions in Maximizing Seller Revenue
The ability of Dutch foreclosure auctions in maximizing seller revenue Why Dutch foreclosure auction prices fall short of the market price Martijn Duijster 0475211 Group 2 Finance, semester 2, 2013-2014 17-7-2014 Bachelor thesis Economics and Business - specialization Finance and Organization Sander Onderstal Faculty of Economics and Business University of Amsterdam Index Abstract 3 1. Introduction 3 2. Dutch real estate auctions 4 3. Literature review 6 3.1. Types of auctions 6 3.2. The revenue equivalence results 8 3.3. Violations of the revenue equivalence result assumption 8 3.3.1. Information asymmetry 9 3.3.2. Competition 10 3.3.3. Bidder affiliation and the winner’s curse 11 4. Hypotheses 12 5. Research method 13 6. Results 15 6.1.. Explanation of the results 17 6.1.1. Information asymmetry 17 6.1.2. Competition 18 6.1.3 Solutions to improve competition 18 6.1.4. Transaction costs 19 6.1.5 Conflicts of interest between seller and owner 21 7. Conclusion 22 References 24 Appendices 26 2 Abstract The revenues in Dutch foreclosure auctions are compared to the market values of the properties. The discount rate is calculated which states the difference between the auction price and the market price. Foreclosure auctions in the Netherlands fail to receive an auction price close to the market price; the average discount rate with auction cost included in the auction price is about 20% and the discount rate when auction costs are excluded is about 27%. Asymmetric information, lack of competition, transaction costs and conflicts of interest may be attributable to this price gap. -
Auction Theory
Auction Theory Jonathan Levin October 2004 Our next topic is auctions. Our objective will be to cover a few of the main ideas and highlights. Auction theory can be approached from different angles – from the perspective of game theory (auctions are bayesian games of incomplete information), contract or mechanism design theory (auctions are allocation mechanisms), market microstructure (auctions are models of price formation), as well as in the context of different applications (procure- ment, patent licensing, public finance, etc.). We’re going to take a relatively game-theoretic approach, but some of this richness should be evident. 1 The Independent Private Value (IPV) Model 1.1 A Model The basic auction environment consists of: Bidders i =1,...,n • Oneobjecttobesold • Bidder i observes a “signal” Si F ( ), with typical realization si • [s, s], and assume F is continuous.∼ · ∈ Bidders’ signals S1,...,Sn are independent. • Bidder i’s value vi(si)=si. • Given this basic set-up, specifying a set of auction rules will give rise to a game between the bidders. Before going on, observe two features of the model that turn out to be important. First, bidder i’s information (her signal) is independent of bidder j’s information. Second, bidder i’s value is independent of bidder j’s information – so bidder j’s information is private in the sense that it doesn’t affect anyone else’s valuation. 1 1.2 Vickrey (Second-Price) Auction In a Vickrey, or second price, auction, bidders are asked to submit sealed bids b1,...,bn. The bidder who submits the highest bid is awarded the object, and pays the amount of the second highest bid. -
Annual Registration Fee $100
Auction Terms and Conditions Welcome to Capital City Auto Auction As a “Buyer” with Capital City Auto Auction (CCAA) you agree to be bound by the following Auction Terms and Conditions. CCAA may amend these terms and conditions at any time, without prior notice. Online Account: CCAA operates as an online auction. All searches, bidding and sale communications are made electro nically via the internet. Buyers must have computer access, an active email address, and register online at CapitalCityAutoAuction.Com with a unique username and password. Most items (Vehicle) at CCAA are donations, and are being sold by a charitable organization. CCAA has NO information regarding the condition or history of any Vehicle. NO physical or mechanical inspections have been performed by CCAA. Vehicles are NOT test driven; CCAA cannot verify drivability or attest to the condition, or soundness of the Vehicle, including but not limited to, the Powertrain, Drivetrain, Suspension, or Electrical Systems. CCAA provides a general description of each Vehicle; however, mechanical problems may be present which are not apparent, visible, or known by CCAA. CCAA is not responsible for the accuracy or incomplete descriptions of Vehicles. Conditions of Sale: All Vehicles sold at CCAA are sold "As-Is, Where-Is, With All Faults", With No Warranty, Expressed or Implied, Including But Not Limited To, Any Warranty of Fitness or Merchantability. Any and all information provided by CCAA in writing, verbally, or in image form pertaining to any auction item, including (when available) the Vehicle Identification Number and License Plate Number, is solely for the Buyer’s convenience.