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Auctions with endogenous rationing have been introduced to stimulate competition. Such (procurement) auctions reduce the volume put out to tender when competition is low. This paper finds a strong negative effect of endogenous rationing on participation when bid-preparation is costly, counteracting the aim to stimulate competition. For multiple auctioneer's objectives mentioned in directives, we derive optimal mechanisms, which differ due to different evaluation of the tradeoff between participation and bid-preparation costs. Thus, the auctioneer needs to decide on an objective. However, reducing bid-preparation costs improves the optimal values of multiple objective functions.

This paper derives Bayesian equilibria under general conditions for a broad family of sealed-bid combinatorial auction formats under incomplete information. Equilibria are constructed by linking an equilibrium of the combinatorial auction format to an equilibrium of its single-unit version, thereby providing a closed-form expression if the single-unit version has one. Auction formats that share the same single-unit version, like the Vickrey auction and all bidder-optimal core-selecting auctions, have common equilibria for any number of items and bidders. Furthermore, if an ex-post equilibrium exists in the single-unit version of an auction then the auction format has an ex-post equilibrium in the combinatorial auction. We characterize the ex-post equilibria for a subfamily of auctions.

We investigate equilibrium bidding behavior of bidders with reference-dependent preferences and independent private values in single-unit English and Dutch clock auctions. Bidders' reference points are endogenous and determined by their strategy and their beliefs about the other bidders. In deriving their strategy, bidders anticipate changes in their reference point due to updated information about others' values (i.e., the own winning probability) during the course of the auction, and make optimal binary decisions at each price (approve or quit in the English auction and wait or bid in the Dutch auction). First, we solve for personal equilibrium profiles, i.e., profiles of bids that contain for each bidder a bidding strategy that is optimal given the others' bidding strategies and the reference point induced by the own and others' strategies. Second, we consider locally preferred personal equilibrium (LPPE) profiles, i.e., personal equilibrium profiles where no bidder can locally find a better personal equilibrium given the others' fixed strategies by varying his reference point via considering different own strategies. The expected revenue in the Dutch auction is higher than in the English auction in the respective unique LPPE profiles. The difference is mainly driven by the aversion to losing the item in the Dutch auction.

We find new equilibria of minimum-revenue core-selecting (MRCS) auctions that, in contrast to previously identified equilibria, involve overbidding - bidding more than one's true value for some packages of goods. With full information, every MRCS auction in every possible setting has equilibria with overbidding and these equilibria have different properties than the previously known equilibria with bid shading. Namely, they can lead to strictly higher revenues for the seller and larger price differences among bidders. Previous studies of MRCS games with incomplete information assumed restricted strategy spaces that prevented overbidding. In this paper, we allow bidders access to their complete strategy sets and show that, in some settings, overbidding occurs in all Bayesian equilibria in undominated strategies. In a simple setting with independent private values, equilibrium strategies of a particular set of MRCS auctions employ a mixture of bid shading and overbidding. These new equilibria improve expected effi ciency relative to equilibria with restricted strategy spaces and lead to higher expected revenues than those from the Vickrey package auction. A second incomplete-information setting demonstrates that equilibria with overbidding can be in some sense unique. In this setting, every Bayesian equilibrium in undominated strategies of every MRCS auction has at least one bidder who overbids and there is no bid shading on winning packages. Overbidding eliminates the threshold problem, leading to an effi cient assignment and payoffs that are in the core with respect to the true values.

We analyze a model of Internet auctions. Sellers each offer one item of a heterogeneous good to bidders who have unit-demand preferences. Items are sold in second-price proxy auctions. We derive a perfect Bayesian (epsilon-) equilibrium. Our experimental findings support the theoretical results. An analysis of sellers' revenues in the Vickrey-auction reveals that they are non-monotonic in bids for substitutes valuations. We combine these results to investigate incomplete bidder-seller networks.

It is not a secret that certain auction formats yield on average higher prices than others. The phenomenon that dynamic auctions are more likely to elicit higher bids than static one-shot auctions is often associated with the term ''auction fever.'' On a psychological level, we consider the so-called pseudo-endowment effect as largely responsible for peoples’ tendency to submit higher bids, potentially amplified by the source-dependence effect. The phenomenon of auction fever is replicated in an experimental investigation of different auction formats within a private values framework where bidders have private but incomplete knowledge of their valuation for a hypothetical good. We suggest this assumption to be more realistic than definite private values, as assumed in the traditional IPV model. An additional experimental investigation within the traditional IPV framework does not either reveal any indication for the appearance of auction fever. On the basis of our experimental observations we present a model of reference-dependent utility theory that comprehends the phenomenon by assuming that bidders' reference points are shifted by the pseudo-endowment and the source-dependence effect.

It is not a secret that certain auction formats yield on average higher prices than others. The phenomenon that dynamic auctions are more likely to elicit higher bids than static one-shot auctions is often associated with the term ''auction fever.'' On a psychological level, we consider the so-called pseudo-endowment effect as largely responsible for peoples’ tendency to submit higher bids, potentially amplified by the source-dependence effect. The phenomenon of auction fever is replicated in an experimental investigation of different auction formats within a private values framework where bidders have private but incomplete knowledge of their valuation for a hypothetical good. We suggest this assumption to be more realistic than definite private values, as assumed in the traditional IPV model. An additional experimental investigation within the traditional IPV framework does not either reveal any indication for the appearance of auction fever. On the basis of our experimental observations we present a model of reference-dependent utility theory that comprehends the phenomenon by assuming that bidders' reference points are shifted by the pseudo-endowment and the source-dependence effect.

Auctions have been developed for economic transactions with asymmetric information and they are the simplest means of price determination for multilateral trading without "market makers." During the last years, new technologies gave a boost to the development and usage of innovative auction formats in several fields. We explore some of the new possibilities of applications and explain the differences to traditional auction formats. Furthermore, we demonstrate the potentialities of auctions concerning information gaining for the auctioneer as well as for the participating bidders.

Auctions have been developed for economic transactions with asymmetric information and they are the simplest means of price determination for multilateral trading without �market makers.� During the last years, new technologies gave a boost to the development and usage of innovative auction formats in several fields. We explore some of the new possibilities of applications and explain the differences to traditional auction formats. Furthermore, we demonstrate the potentialities of auctions concerning information gaining for the auctioneer as well as for the participating bidders.

Dissertation, RWTH Aachen University, 2018; Aachen 1 Online-Ressource (85 Seiten) : Illustrationen (2018). = Dissertation, RWTH Aachen University, 2018, The difference between the willingness-to-pay (WTP) and the willingness-to-accept (WTA) has been widely studied and established in the literature. A WTP-WTA disparity is particularly relevant when the agents do not know whether they will be the buyer or the seller of an object, because then they are forced to assess both their WTP and their WTA. This phenomenon occurs in mechanisms to dissolve a partnership, i.e., an indivisible object that is jointly owned by more than one agent. Agents do not know ex-ante whether they will be buying the shares of other agents or selling their own share. Dissolution mechanisms decide which agent is to be awarded the partnership and how the others are to be compensated. The first section of this dissertation identifies a necessary and sufficient condition for the existence of an efficient dissolution mechanism in an independent private values model. In our setup – in contrast to the standard case, where the WTP and the WTA coincide – the existence of such a mechanism cannot be guaranteed. The second section analyzes a dissolution mechanism that is used in practice and is known to be efficient if there is no difference between the WTP and the WTA: the k+1-price auction. We show that even for an arbitrarily small difference between the WTP and the WTA, the k+1-price auction is inefficient. In addition, if the difference exceeds a certain threshold, agents are not willing to participate in the auction. Because of that, we analyze variations of the k+1-price auction which guarantee voluntary participation. The last section provides an experimental analysis of the performance of (combinatorial) core-selecting and Vickrey auctions. It contributes to the literature by explicitly testing equilibrium predictions under the realistic assumption of incomplete information. In the experiment, the proportion of efficient assignments is high for all auctions. The core-selecting auction performs better than the combinatorial Vickrey auction in generating revenue and in selecting stable (core) allocations. Interestingly, in an independent private values setting, the core-selecting auction is predicted to select fewer (eponymous) core allocations than the Vickrey auction and the data point in the opposite direction. The core-selecting auction provides incentives for overbidding the own valuation and – under certain conditions – also for bid-shading, which can hamper performance. The participants react to these incentives, though less pronouncedly than predicted., Published by Aachen