Auctioning Class Settlements
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MICROECONOMICS and POLICY ANALYSIS - U8213 Professor Rajeev H
MICROECONOMICS AND POLICY ANALYSIS - U8213 Professor Rajeev H. Dehejia Class Notes - Spring 2001 Auctions Wednesday, February 14 Reading: Handout, Thaler, Milgram There are two basic forms of auctions: Sealed bid submissions and open bids. In a sealed bid auction individuals do not know what others are bidding. Two types of Sealed Bid Auctions: 1st Price sealed bid auction: The highest bid submitted will be the winning bid. The winner pays what he/she bid. 2nd Price sealed bid auction: Everyone submits sealed bids and the winner is the one who submits the highest bid BUT the price paid by the winner is the 2nd highest bid submitted. Two types of open auctions: English auction: The bidding starts low and incrementally rises until someone is the highest bidder and no one is willing to outbid the highest bidder. Dutch auction: The price starts very high and is keeps going down until someone bids. The first person to bid wins. Why Study Auctions? 1) Auctions can be an efficient method of valuing goods. For example: rights to air waves, signals and bandwidth. The government auctioned off parts of the spectrum in anticipation of new technology. The auctions were appealing because well- structured auctions get people to reveal the true valuation of the good. The company (private entity) actually ends up paying to the government what the good is worth to them. It turned out with these auctions that the willingness to pay for a slice of the spectrum, as revealed by the auction outcome, was much higher than expected. 2) Procurement: Governments and entities want to procure goods and services at the lowest possible price (like an auction in reverse). -
A Fair and Secure Reverse Auction for Government Procurement
sustainability Article A Fair and Secure Reverse Auction for Government Procurement Chia-Chen Lin 1,*, Ya-Fen Chang 2, Chin-Chen Chang 3 and Yao-Zhu Zheng 4 1 Department of Computer Science and Information Engineering, National Chin-Yi University of Technology, Taichung 41170, Taiwan 2 Department of Computer Science and Information Engineering, National Taichung University of Science and Technology, Taichung 40401, Taiwan; [email protected] 3 Department of Information Engineering and Computer Science, Feng Chia University, Taichung 40724, Taiwan; [email protected] 4 Department of Computer Science, National Tsing Hua University, Hsinchu 30013, Taiwan; [email protected] * Correspondence: [email protected] Received: 21 August 2020; Accepted: 12 October 2020; Published: 16 October 2020 Abstract: With the development of e-commerce, the electronic auction is attracting the attention of many people. Many Internet companies, such as eBay and Yahoo!, have launched online auction systems. Many researchers have studied the security problems of electronic auction systems, but few of them are multi-attribute-based. In 2014, Shi proposed a provable secure, sealed-bid, and multi-attribute auction protocol based on the semi-honest model. We evaluated this protocol and found that it has some design weaknesses and is vulnerable to the illegal operations of buyers, which results in unfairness. In this paper, we improved this protocol by replacing the Paillier’s cryptosystem with the elliptic curve discrete (ECC), and we designed a novel, online, and multi-attribute reverse-auction system using the semi-honest model. In our system, sellers’ identities are not revealed to the buyers, and the buyers cannot conduct illegal operations that may compromise the fairness of the auction. -
Shill Bidding in English Auctions
Shill Bidding in English Auctions Wenli Wang Zoltan´ Hidvegi´ Andrew B. Whinston Decision and Information Analysis, Goizueta Business School, Emory University, Atlanta, GA, 30322 Center for Research on Electronic Commerce, Department of MSIS, The University of Texas at Austin, Austin, TX 78712 ¡ wenli [email protected] ¡ [email protected] [email protected] First version: January, 2001 Current revision: September 6, 2001 Shill bidding in English auction is the deliberate placing bids on the seller’s behalf to artificially drive up the price of his auctioned item. Shill bidding has been known to occur in auctions of high-value items like art and antiques where bidders’ valuations differ and the seller’s payoff from fraud is high. We prove that private- value English auctions with shill bidding can result in a higher expected seller profit than first and second price sealed-bid auctions. To deter shill bidding, we introduce a mechanism which makes shill bidding unprofitable. The mechanism emphasizes the role of an auctioneer who charges the seller a commission fee based on the difference between the winning bid and the seller’s reserve. Commission rates vary from market to market and are mathematically determined to guarantee the non-profitability of shill bidding. We demonstrate through examples how this mechanism works and analyze the seller’s optimal strategy. The Internet provides auctions accessible to the general pub- erature on auction theories, which currently are insufficient to lic. Anyone can easily participate in online auctions, either as guide online practices. a seller or a buyer, and the value of items sold ranges from a One of the emerging issues is shill bidding, which has become few dollars to millions. -
Game Theory 2021
More Mechanism Design Game Theory 2021 Game Theory 2021 Ulle Endriss Institute for Logic, Language and Computation University of Amsterdam Ulle Endriss 1 More Mechanism Design Game Theory 2021 Plan for Today In this second lecture on mechanism design we are going to generalise beyond the basic scenario of auctions|as much as we can manage: • Revelation Principle: can focus on direct-revelation mechanisms • formal model of direct-revelation mechanisms with money • incentive compatibility of the Vickrey-Clarke-Groves mechanism • other properties of VCG for special case of combinatorial auctions • impossibility of achieving incentive compatibility more generally Much of this is also (somewhat differently) covered by Nisan (2007). N. Nisan. Introduction to Mechanism Design (for Computer Scientists). In N. Nisan et al. (eds.), Algorithmic Game Theory. Cambridge University Press, 2007. Ulle Endriss 2 More Mechanism Design Game Theory 2021 Reminder Last time we saw four auction mechanisms for selling a single item: English, Dutch, first-price sealed-bid, Vickrey. The Vickrey auction was particularly interesting: • each bidder submits a bid in a sealed envelope • the bidder with the highest bid wins, but pays the price of the second highest bid (unless it's below the reservation price) It is a direct-revelation mechanism (unlike English and Dutch auctions) and it is incentive-compatible, i.e., truth-telling is a dominant strategy (unlike for Dutch and FPSB auctions). Ulle Endriss 3 More Mechanism Design Game Theory 2021 The Revelation Principle Revelation Principle: Any outcome that is implementable in dominant strategies via some mechanism can also be implemented by means of a direct-revelation mechanism making truth-telling a dominant strategy. -
Introduction to Auctions Protocols Revenue and Optimal Auctions Common Value Auctions
Auctions Kate Larson Introduction Auction Protocols Common Auction Introduction to Auctions Protocols Revenue and Optimal Auctions Common Value Auctions Vulnerabilities Kate Larson in Auctions Beyond Single Cheriton School of Computer Science Item Auctions University of Waterloo Summary Outline Auctions Kate Larson 1 Introduction Introduction Auction Protocols 2 Auction Protocols Common Auction Protocols Common Auction Protocols Revenue and Optimal Auctions Common Value Revenue and Optimal Auctions Auctions Common Value Auctions Vulnerabilities in Auctions Beyond Single 3 Vulnerabilities in Auctions Item Auctions Summary 4 Beyond Single Item Auctions 5 Summary Auctions Auctions Kate Larson Methods for allocating goods, tasks, resources,... Introduction Participants Auction auctioneer Protocols Common Auction bidders Protocols Revenue and Optimal Auctions Enforced agreement between auctioneer and the Common Value Auctions winning bidder(s) Vulnerabilities in Auctions Easily implementable (e.g. over the Internet) Beyond Single Conventions Item Auctions Summary Auction: one seller and multiple buyers Reverse auction: one buyer and multiple sellers Todays lecture will discuss the theory in the context of auctions, but this applies to reverce auctions as well (at least in 1-item settings). Auction Settings Auctions Kate Larson Introduction Private value: the value of the good depends only on Auction the agent’s own preferences Protocols e.g a cake that is not resold of showed off Common Auction Protocols Revenue and Common value: an agent’s value of an item is Optimal Auctions Common Value determined entirely by others’ values (valuation of the Auctions item is identical for all agents) Vulnerabilities in Auctions e.g. treasury bills Beyond Single Item Auctions Correlated value (interdependent value): agent’s Summary value for an item dpends partly on its own preferences and partly on others’ value for it e.g. -
Reverse Live Auction for Bidder
Process for Reverse Live Auction What is Reverse Live Auction? Reverse Live Auction (RLA) implemented in the Chhattisgarh State Power Companies uses Supplier Relationship Management (SRM) module of SAP (globally Known ERP). RLA provides a real-time environment which drives bottom-line results significantly by putting suppliers into direct competition with each other. Transaction type “English Auction” is used in RLA which works on principal “New Bid Must Beat Overall Best Bid”. RLA have the provision of setting up the auction with automatic extensions that is if the bid is submitted within few minutes/seconds of the auction end time. The auction end time will automatically get extended, based on the timing parameters fixed by purchaser. Automatic Extension of end time in RLA is based on below given 3 parameters defined by Purchaser and also visible to bidders once the RLA is published: • Remaining Time Trigger: This field refers to the duration of time (minutes), before which Reverse Live Auction is programmed to end, if a new bid is placed within this time duration, the RLA will be extended with specified time (Extension Period). • Extension Period: The span of time (hours or minutes) by which the system extends an RLA, if a bid is received during “Remaining Time Trigger” period. • Number of Extensions: This field depicts the maximum number of times by which an auction can be extended automatically. Process for Reverse Live Auction Please follow the below given steps to configure Java to run the “Live Auction Cockpit” in case the Application is blocked by JAVA: 1. Go to Control Panel > Double click on JAVA to open. -
Auctioning One Item
Auctioning one item Tuomas Sandholm Computer Science Department Carnegie Mellon University Auctions • Methods for allocating goods, tasks, resources... • Participants: auctioneer, bidders • Enforced agreement between auctioneer & winning bidder(s) • Easily implementable e.g. over the Internet – Many existing Internet auction sites • Auction (selling item(s)): One seller, multiple buyers – E.g. selling a bull on eBay • Reverse auction (buying item(s)): One buyer, multiple sellers – E.g. procurement • We will discuss the theory in the context of auctions, but same theory applies to reverse auctions – at least in 1-item settings Auction settings • Private value : value of the good depends only on the agent’s own preferences – E.g. cake which is not resold or showed off • Common value : agent’s value of an item determined entirely by others’ values – E.g. treasury bills • Correlated value : agent’s value of an item depends partly on its own preferences & partly on others’ values for it – E.g. auctioning a transportation task when bidders can handle it or reauction it to others Auction protocols: All-pay • Protocol: Each bidder is free to raise his bid. When no bidder is willing to raise, the auction ends, and the highest bidder wins the item. All bidders have to pay their last bid • Strategy: Series of bids as a function of agent’s private value, his prior estimates of others’ valuations, and past bids • Best strategy: ? • In private value settings it can be computed (low bids) • Potentially long bidding process • Variations – Each agent pays only part of his highest bid – Each agent’s payment is a function of the highest bid of all agents • E.g. -
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. -
UNCITRAL Considers Electronic Reverse Auctions, As Comparative Public Procurement Comes of Age in the U.S
GW Law Faculty Publications & Other Works Faculty Scholarship 2005 UNCITRAL Considers Electronic Reverse Auctions, as Comparative Public Procurement Comes of Age in the U.S. Christopher R. Yukins George Washington University Law School, [email protected] Don Wallace Jr. Follow this and additional works at: https://scholarship.law.gwu.edu/faculty_publications Part of the Government Contracts Commons Recommended Citation Christopher R. Yukins & Don Wallace Jr., UNCITRAL Considers Electronic Reverse Auctions, as Comparative Public Procurement Comes of Age in the U.S., Pub. Procurement L. Rev. (2005). This Article is brought to you for free and open access by the Faculty Scholarship at Scholarly Commons. It has been accepted for inclusion in GW Law Faculty Publications & Other Works by an authorized administrator of Scholarly Commons. For more information, please contact [email protected]. UNCITRAL Considers Electronic Reverse Auctions, as Comparative Public Procurement Comes of Age in the U.S. Christopher R. Yukins Don Wallace, Jr.1 The United Nations Commission on International Trade Law (UNCITRAL) is revising the UNCITRAL Model Procurement Law, to reflect emerging practices in procurement. That effort, it is hoped, will yield real benefits for emerging nations that rely on the UNCITRAL model law to shape their procurement systems. In late January 2005, as part of that reform effort, the UNCITRAL Secretariat hosted a meeting of international experts in Vienna, Austria, to discuss how electronic auctions should be handled under the Model Law, and to assess the concomitant problem of unrealistically low pricing (known in the European system as "abnormally low bids"). In April 2005, an UNCITRAL working group of representatives from around the world met to develop proposed changes to the UNCITRAL Model Law.2 These efforts will, it is hoped, lead to 1 Christopher Yukins ([email protected]) is an associate professor of government contracts law at The George Washington University Law School, and Don Wallace, Jr. -
English and Vickrey Auctions
CHAPTER ONE English and Vickrey Auctions I describe a bit of the history of auctions, the two pairs of standard auction forms, and the ideas of dominance and strategic equivalence. 1.1 Auctions It is hard to imagine modern civilization without buying and selling, which make possible the division of labor and its consequent wealth (Smith, 1776). For many common and relatively inexpensive commodi ties, the usual and convenient practice at the retail level, in the West anyway, is simply for the seller to post a take-it-or-leave-it price, and for the prospective buyer to choose what to buy and where to buy it, perhaps shopping for favorable prices. I haven’t tried haggling over price at a Wal-Mart, but I can’t imagine it would get me very far. For some big-ticket items, however, like houses and cars, haggling and counteroffers are expected, even in polite society, and bargaining can be extended over many rounds. In some cultures, haggling is the rule for almost all purchases. A third possibility, our subject here, is the auction, where many prospective buyers compete for the opportunity to purchase items, either simultaneously, or over an extended period of time. The main attraction of the auction is that it can be used to sell things with more or less uncertain market value, like a tractor in a farmer’s estate, a manufacturer’s overrun of shampoo, or the final working copy of Beethoven’s score for his Ninth Symphony (see fig. 1.1). It thus promises to fetch as high a price as possible for the seller, while at the same time offering to the buyer the prospect of buying items at bargain prices, or perhaps buying items that would be difficult to buy in any other way. -
Reverse Auction in Pricing Model by Nagabhushan.S.V, Praveen Kulkarni, Dr.K.N
Global Journal of Computer Science and Technology Volume 12 Issue 7 Version 1.0 April 2012 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Inc. (USA) Online ISSN: 0975-4172 & Print ISSN: 0975-4350 Reverse Auction in Pricing Model By Nagabhushan.S.V, Praveen kulkarni, Dr.K.N. Subramanya & Dr.G.N.Srinivasan R V College of Engineering Abstract - Dynamic price discrimination adjusts prices based on the option value of future sales, which varies with time and units available. This paper surveys the theoretical literature on dynamic price discrimination, and confronts the theories with new data from airline pricing behavior, Consider a multiple booking class airline-seat inventory control problem that relates to either a single flight leg or to multiple flight legs. During the time before the flight, the airline may face the problems of (1) what are the suitable prices for the opened booking classes, and (2) when to close those opened booking classes. This work deals with these two problems by only using the pricing policy. In this paper, a dynamic pricing model is developed in which the demand for tickets is modeled as a discrete time stochastic process. An important result of this work is that the strategy for the ticket booking policy can be reduced to sets of critical decision periods, which eliminates the need for large amounts of data storage. Keywords : Bidding, dynamic pricing, electronic markets, group-buying discounts, Internet based selling, market microstructure, online retailing, pricing mechanism. GJCST Classification: K.4.4 Reverse Auction in Pricing Model Strictly as per the compliance and regulations of: © 2012.