Search

This study explores the effect of varying cash endowments on bidding behavior in auction experiments conducted in a developing country. Our results suggest that cash endowment levels can have different effects on bidding behavior under second price auction and random nth price auction. In contrast to past studies conducted in developed countries, we generally do not see the presence of positive house money effect in our results. If behavior varies significantly as the cash endowment is varied, then care must be taken when designing auction experiments or when comparing results to other experimental results and theoretical predictions.

Increasing use of computers and networks in business, government, recreation, and almost all aspects of daily life has led to a proliferation of online sensitive data about individuals and organizations. Consequently, concern about the privacy of these data has become a top priority, particularly those data that are created and used in electronic commerce. There have been many formulations of privacy and, unfortunately, many negative results about the feasibility of maintaining privacy of sensitive data in realistic networked environments. We formulate communication-complexity-based definitions, both worst-case and average-case, of a problem's privacy-approximation ratio. We use our definitions to investigate the extent to which approximate privacy is achievable in two standard problems: the second-price Vickrey auction and the millionaires problem of Yao. For both the second-price Vickrey auction and the millionaires problem, we show that not only is perfect privacy impossible or infeasibly costly to achieve, but even close approximations of perfect privacy suffer from the same lower bounds. By contrast, we show that, if the values of the parties are drawn uniformly at random from {0,...,2^k-1}, then, for both problems, simple and natural communication protocols have privacy-approximation ratios that are linear in k (i.e., logarithmic in the size of the space of possible inputs). We conjecture that this improved privacy-approximation ratio is achievable for any probability distribution., Comment: 33 pages, seven figures, two tables. Changes in version 2 include an expanded discussion of other approaches to approximate privacy and added acknowledgements

Inspired by some spectrum auctions we consider a stylized license auction with incumbents and a potential entrant. Whereas the entrant values only the bundle of several spectrum blocks (synergy), incumbents’ marginal valuations are non-increasing. The seller proactively encourages entry and subjects incumbents to a spectrum cap. In this framework, a simultaneous multi-round auction (SMRA) gives rise to an exposure problem that distorts efficiency and yields low revenue. We consider three remedies and rank their performance: a combinatorial Vickrey auction, a SMRA with exit option that allows the entrant to annul his bid, and a SMRA with call option that lifts the spectrum cap if entry failed to occur and then allows the successful incumbent to acquire stranded spectrum at a fixed price.

I analyze an auction environment where two units of an object are sold at two simultaneous, sealed-bid, first-price auctions to bidders who have a one-dimensional type space, where a type represents the value a bidder places on each of the two units. All bidders have an identical budget constraint that binds their ability to spend in the auctions. I show that if the valuation distribution is atom-less then there does not exist any equilibrium in behavioral strategies in this auction game.

This study examines the theoretical effect of information asymmetry on auction and bidding. The study indicates the significant impact of information asymmetry on the price the winner pays in an auction process. The impact varies from one form of auction to the other. In sealed-bid auction, the more informed party has a much higher marginal expected return than the uninformed competitors. The probability of loser's curse is markedly higher than the probability of winner's curse among uninformed participants that have high private value in English auction. Since bidders are more affected by information asymmetry, it is recommended that bidder should seek for information on goods of interest and also ensure that inspection is carried out on prospective purchases before the auction commences in order to reduce the negative effect of information asymmetry on bidder.

We describe two auction forms for search engine advertising and present two simple theoretical results concerning i) the estimation of click-through rates and ii) how to adjust the auctions for broad match search. We also describe some of the practical issues involved in implementing a VCG auction.

Auctions have been studied extensively as an economic marketplace. The economist's focus is on modeling final sales prices, but the processes that give rise to those outcomes are rarely studied in great detail. This research is intended to provide that complementary perspective. We show how the interactions between bidders in an auction unfold in a dynamic pattern of bids and counter-bids, and thereby over the duration of an auction, create a network structure. The auction network contributes significantly to models of price dynamics and the network predicts final sales prices better than economic (non-network) indicators alone. In addition, network analyses are useful in identifying the key bidders whose actions seem to exert disproportionate influence on other bidders and the final sales prices. Furthermore, the key bidders may be identified very early in an auction process, which has practical implications for the auction house managers and for other bidders.

This paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently. The empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price, reserve and opening bid. The findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself. Factors such as auction participation, the number of individual bidders and the number of bids are significant in a number of the alternative specifications.

We study the Uniform Price Auction, one of the standard sealed-bid multi-unit auction formats in Auction Theory, for selling multiple identical units of a single good to multi-demand bidders. Contrary to the truthful and efficient multi-unit Vickrey auction, the Uniform Price Auction encourages strategic bidding and is generally inefficient, due to a "Demand Reduction" effect; bidders tend to bid for fewer (identical) units, so as to receive them at a lower uniform price. All the same, the uniform pricing rule is popular by its appeal to the anticipation that identical items should be identically priced. Its applications include, among others, sales of U.S. Treasury notes to investors and trade exchanges over the Internet facilitated by popular online brokers. In this work, we characterize pure undominated bidding strategies and give an algorithm for computing pure Nash equilibria in such strategies. Subsequently we show that their Price of Anarchy is ee?1$\frac {e}{e-1}$. Finally, we show that the Price of Anarchy of mixed Bayes-Nash equilibria with undominated support is at most 4?2k$4-\frac {2}{k}$, where k is the number of auctioned items. To the best of our knowledge, our work provides the first (constructive) proof of existence of pure Nash equilibria in undominated strategies and the first performance evaluation (with respect to economic efficiency) of this popular auction format.

This paper describes a nearly optimal auction mechanism that does not require previous knowledge of the distribution of values of potential buyers. The mechanism we propose builds on the new literature on the elicitation of information from experts. We extend the latter to the case where the secret information shared by the experts–potential buyers in our model–can be used against them if it becomes public knowledge.

Kushilevitz [1989] initiated the study of information-theoretic privacy within the context of communication complexity. Unfortunately, it has been shown that most interesting functions are not privately computable [Kushilevitz 1989, Brandt and Sandholm 2008]. The unattainability of perfect privacy for many functions motivated the study of approximate privacy . Feigenbaum et al. [2010a, 2010b] define notions of worst-case as well as average-case approximate privacy and present several interesting upper bounds as well as some open problems for further study. In this article, we obtain asymptotically tight bounds on the trade-offs between both the worst-case and average-case approximate privacy of protocols and their communication cost for Vickrey auctions. Further, we relate the notion of average-case approximate privacy to other measures based on information cost of protocols. This enables us to prove exponential lower bounds on the subjective approximate privacy of protocols for computing the Intersection function, independent of its communication cost. This proves a conjecture of Feigenbaum et al. [2010a].

With the emergence of dynamic spectrum access technology and quick growth in demands for broadband mobile access, exploitation of short-interval spectrum availability offers an opportunity to better utilize spectrum. A short-interval secondary spectrum (SiSS) market is proposed in this paper, where a Mobile Network Operator (MNO) rents out multiple units of homogeneous spectrum units to Mobile Virtual Network Operators (MVNO) on a short-interval basis via a SiSS broker. The mandated SiSS broker not only presides over the trading but also manages an online database which is significant to the communication between MNO and MVNOs. For the purpose of efficient trading, we adopt the Vickrey-Clarke-Groves (VCG) auction as the basis to design a truthful SiSS auction. There are a few innovations. The first is a highly expressive cumulative bidding format, which allows maximum bidding options to MVNOs and eliminates the need for iterative bid refinement. The second is incremental bid constraint with reserve price to ensure bid per unit higher than the reserve price. Thirdly, an iterative allocation and payment calculation is so designed that per unit payments of winning MVNOs are higher than the reserve price set by MNO while maintaining the VCG merit of truthful bidding. A rational MNO is thus incentivized to put lowly utilized spectrum units for rent. Preliminary numerical experimentation demonstrates that the truthful SiSS auction generates to MNO in average 23% higher revenue per spectrum unit than the VCG auction. Computation time for broker to clear the auction is within 10 seconds for up to 50 bidders and 200 spectrum units, which suits SiSS applications.

We study the sale of an indivisible good to liquidity constrained buyers: they cannot pay more than their “budget” regardless of their valuation. Both valuation and budget are private information. We derive the symmetric revenue maximizing and constrained efficient auctions in this setting. We show an implementation via a modified all-pay auction. The highest bidder need not win the good outright, or, stated differently, the auction has “pooling,” despite the usual regularity conditions. Subsidizing low budget buyers cannot increase revenue. From a technical standpoint, we contribute to auction design with multidimensional private information by working directly with reduced-form allocation rules.

Consider a firm, called the buyer, that satisfies its demand over two periods by assigning both demands to a supplier via a second-price procurement auction; call this the Standard auction. In the hope of lowering its purchase cost, the firm is considering an alternative procedure in which it will also allow bids on each period individually, where there can be either one or two winners covering the two demands; call this the Multiple Winner auction. Choosing the Multiple Winner auction over the Standard auction can in fact result in a higher cost to the buyer. We provide a bound on how much greater the buyer’s cost can be in the Multiple Winner auction and show that this bound is tight. We then sharpen this bound for two scenarios that can arise when the buyer announces his demands close to the beginning of the demand horizon. Under a monotonicity condition, we achieve a further sharpening of the bound in one of the scenarios. Finally, this monotonicity condition allows us to generalize this bound to the T-period case in which bids are allowed on any subset of period demands.

Auction has been widely used to spectrum allocation. Most of the previous works supposed that all the spectrum are identical. However, in reality, spectrums are quite different in different locations and frequencies. Recently, some works studied the double auction mechanism for heterogeneous spectrums. But their schemes are based on the assumption of "single-channel request". To be more realistic, each seller and buyer will bid at least one channel. The previous schemes will not work under multi-channel assumption. In this paper, we propose a truthful multi-channel double auction mechanism for heterogeneous spectrums. Our scheme allows sellers and buyers to sell or buy multi-channels for heterogeneous spectrums. We introduce a novel virtual grouping method to split sellers and buyers. We prove that the proposed scheme satisfies the economic properties: truthfulness, individual rationality and budget balance. The simulation results confirm that our method achieves high auction efficiency and auction revenue.

We analyze the bidding behavior in a strictly descending multi-unit auction where the price decreases continuously without going back to the initial start price once an object is sold. We prove that any equilibrium in the multi-unit descending auction is inefficient. We derive a symmetric equilibrium for general distribution functions as well as an arbitrary number of bidders and objects. Moreover, equilibrium bidding is characterized by a set of initial value problems. Our analysis thus generalizes previous results in the literature.

Although rational choice theory presumes people have a point estimate of their willingness to pay (WTP) for a good or service, the idea of coherent arbitrariness suggests they have an interval of values. Herein we explore bidding behavior in a second-price auction in which bidders have point or interval values and point or interval bidding. We find bidders bid rationally: (i) when bidders have a point value but are asked to state an interval bid, they choose to bid as an interval with the point value as the mean of the interval; (ii) bidders who had a value interval but are asked to bid as a point estimate bid the expected value from the interval; and (iii) bidders with an interval value and who bid an interval such that expected bids equate expected values.

This paper proposes an English auction protocol to preserve a secure, fair, and effective online auction environment, where the operations are integrated with mobile agent technology for bidders participating in online auctions. The protocol consists of four participants, namely, registration manager, agent house, auction house, and bidder.

We present a cloud resource procurement approach which not only automates the selection of an appropriate cloud vendor but also implements dynamic pricing. Three possible mechanisms are suggested for cloud resource procurement: cloud-dominant strategy incentive compatible (C-DSIC), cloud-Bayesian incentive compatible (C-BIC), and cloud optimal (C-OPT). C-DSIC is dominant strategy incentive compatible, based on the VCG mechanism, and is a low-bid Vickrey auction. C-BIC is Bayesian incentive compatible, which achieves budget balance. C-BIC does not satisfy individual rationality. In C-DSIC and C-BIC, the cloud vendor who charges the lowest cost per unit QoS is declared the winner. In C-OPT, the cloud vendor with the least virtual cost is declared the winner. C-OPT overcomes the limitations of both C-DSIC and C-BIC. C-OPT is not only Bayesian incentive compatible, but also individually rational. Our experiments indicate that the resource procurement cost decreases with increase in number of cloud vendors irrespective of the mechanisms. We also propose a procurement module for a cloud broker which can implement C-DSIC, C-BIC, or C--OPT to perform resource procurement in a cloud computing context. A cloud broker with such a procurement module enables users to automate the choice of a cloud vendor among many with diverse offerings, and is also an essential first step toward implementing dynamic pricing in the cloud.

This note contains the equilibrium bid functions for two types of common-value procurement auctions: 1) a procurement auction in which bids represent an enforceable contract; 2) a procurement auction in which, upon learning the true cost of supplying the good, the winning bidder can renegotiate the contract with the buyer, and each bidder must submit a bond with their bid, which is returned at the end of the auction unless they are the low bidder and renegotiate the contract.

We analyze auctions with positive externality, wherein the utility of each player who submitted a losing bid is strictly increasing in the price paid by the winning bidder. Such an auction was recently proposed for determining the starting team and the starting yard line in an overtime period in American football. We analyze the NFL case and also consider other football leagues, as well as tie-breaking by penalty shots in soccer, and overcoming a draw situation in chess.

This article compares whether the first-price sealed-bid tender or the ascending English open auction generates higher revenue for the seller. Using a unique set of data for land sales and accounting for the presence of an endogenous discrete mechanism choice variable, our results show that the first-price sealed-bid tender generates a lower land price, in the range of 1.2–9.6%, than the English open auction. Our results validate the theoretical prediction that open auctions result in higher prices because bidders can infer other bidders’ information by observing their bids in the common value auction paradigm.

This paper investigates Japanese consumers' willingness to pay for Marine Stewardship Council (MSC) ecolabelled seafood using a sealed bid, second price auction. Participants in an experiment in Tokyo were provided varying degrees of information about the status of world and Japanese fisheries and the MSC program in sequential rounds of bidding on ecolabelled and nonlabelled salmon products. A random-effects tobit regression shows that there is a statistically significant premium of about 20 per cent for MSC-ecolabelled salmon over nonlabelled salmon when consumers are provided information on both the status of global fish stocks and the purpose of the MSC program. This premium arises from a combination of an increased willingness to pay for labelled products and a decreased willingness to pay for unlabelled products. However, in the absence of experimenter-provided information, or when provided information about the purpose of the MSC program alone without concurrent information about the need for the MSC program, there is no statistically significant premium.

Auction sellers can use a reserve price to require a minimum bid before items are sold. Theoretical and experimental research has tested the influence of a reserve price in an independent private values auction, but little focus has been given to the influence of a reserve price in a first-price common-value auction. We establish an agent-based first-price common-value auction to determine the impact of the reserve price with two buyers and with three buyers. An agent-based approach to this problem is both a unique contribution to the literature and appropriate since finding analytical solutions with common-value auctions is difficult. The agent-based model approach also allows us to consider buyers that have non-symmetric bid functions. Furthermore, we introduce a combination of numerical integration techniques with a new particle swarm learning algorithm. The buyers in the model choose their expected-net-revenue-maximizing bid price, and sellers choose their expected-revenue-maximizing reserve price. In the two-buyer and three-buyer auction, a reserve price increases the equilibrium winning bid price, decreases the probability that the item is sold, and increases the seller's expected revenue. A reserve price in a two-buyer auction increases the winning bid price more than including an additional buyer in the auction with no reserve price. However, due to only receiving a salvage value when the item does not sell in the auction, the seller's expected revenue is higher in the three-buyer first-price common-value auction without a reserve price than in the two-buyer auction with a reserve price.

The first spectrum auction in the Republic of Korea is attention-worthy owing to the fierce competition for the only 1.8-GHz spectrum license, the winning bidder of which was suspected of overpaying for its acquisition. This study empirically investigates the existence of a "winner's curse" in the first Korean spectrum auction by using a standard event study methodology. The results show that both the winner and loser experienced significant positive returns on the completion day of the auction. The results imply that there was no winner's curse in the auction and that the losing firm might increase its competitive advantage by acquiring other spectrum licenses despite failing to achieve its initial target spectrum. Therefore, these results suggest that regulators may need to consider bringing about positive short-term wealth benefits to all bidders by appropriately designing a spectrum auction, such as by performing multiband auctions.

We investigated and compared economic performance of auction, negotiation and hybrid mechanisms of the NegotiAuction software. With the auction mechanism, bidders are required to submit bids consisting of quantity needed and other relevant non-price attributes, then they are returned with suggested prices to make them active. With the negotiation mechanism, the requested price button is turned off and the auction owner and the bidder are free to negotiate on one-on-one basis with other issues besides price and quantity. With the hybrid mechanism, characteristics of both negotiation and auction are combined. Twelve hypotheses involving economic performance measures were tested. On many measures, the hybrid mechanism was best for the auction owners.

A keyword auction is conducted by Internet search engines to sell advertising slots listed on the search results page. Although much of the literature assumes the dynamic bidding strategy that utilizes the current bids of other advertisers, such information is, in practice, not available for participants in the auction. This paper explores the bidding behavior of advertisers in a sealed-bid environment, where each bidder does not know the current bids of others. This study considers secure bidding with a trial bid (SBT) as the bid adjustment process used by the advertisers, which is functional in a sealed-bid environment. It is shown that the SBT bid adjustment process converges to some equilibrium point in a one-shot game irrespective of the initial bid profile. Simulation results verify that a sealed-bid environment would be beneficial to search engines. Bidding behaviors in a sealed-bid keyword auction is analyzed.Even in a sealed bid environment, bidding behavior with a minimal search for others bids leads to a unique fixedpoint.A computer simulation shows that a sealed bid environment is beneficial to a search engine.

This is a brief survey of the theory of auction. We first discuss the types of agents who participate in an auction and their respective objectives. In the next section we briefly explain the concepts of standard auction, revenue equivalence theorem (perhaps the most cited result in auction theory, along with the result of Myerson on optimal auction), optimal auction, interdependent valuations, risk and some other commonly used concepts. Finally we discuss the theory of contest, as contests are essentially auctions where a part of the payment function is exogenously given to the contestants. JEL Classification: D44 (Auctions)

This paper analyzes efficiency in a uniform-price multi-unit auction with a positive reservation price. I demonstrate that the reservation price is an important policy tool that may increase efficiency (or welfare) in multi-unit uniform-price auctions. I show that the higher the reservation price is, the higher is the sellerʼs revenue and the higher is the efficiency of a final allocation of units that could be attained in a multi-unit uniform-price auction. The reservation price increases the bidderʼs equilibrium strategy in a specific way that is inherent to the uniform-price auction. Thus the reservation price effect on efficiency is in contrast to other auction formats; e.g., the reservation price decreases efficiency in the Vickrey auction and single-unit auctions with symmetric bidders. Therefore the main result can be added to the list of results from mechanism design and auction theory that fail to extend the single-unit/single-dimensional context to the multi-unit/multi-dimensional one.

Within the independent private value paradigm, this note first analyzes two-round sequential first-price auctions with multi-unit demand. We show that the expected price in the first round is strictly lower than that in the second round due to the “extraction effect”. We then compare the revenues for the sequential auctions and the simultaneous auctions. We show that the discriminatory auction, the Vickrey auction, and the sequential second-price auctions generate the same revenue for the seller, followed in order by the sequential first-price auctions, and by the uniform-price auction.

This paper presents a multiple-round timber auction simulation, developed in order to study various configurations of auction design. In this study, simultaneous sequential timber auctions are modelled and analysed using agent-based simulation technology. As there are many individual items in the auction to be sold, the auction designer defines several rounds that are sequential at pre-defined intervals. At each round, the auction designer announces several simultaneous auctions. Since bidders are offered different items at each round, a mathematical linear programing model for selecting the best set of items to bid for is presented. Different bidding patterns are simulated and compared in various setup configurations. The most advanced of these strategies are adaptive and use agent-learning capability. The comparisons include the success rate of winning the auction and the winning price per m3. This study suggests an efficient bidding pattern for bidders to bid in order to achieve to their goal and increase their profit. Similarly, in order to increase profit, the auctioneer (i.e. the government) needs to control several auction parameters including the number of auctions per year, the lot size, the auction periodicity, and the number of bidders. This study also suggests parameters configurations that to maximise revenue for the auctioneer.

In this paper, we study the problem of auctioning a kind of continuous homogeneous divisible goods, and present a multi-stage sequential auction mechanism of divisible goods under uniform price. In this mechanism, the auction process is divided into multiple stages, all bidders satisfy the sequential rationality conditions, all bidders are asymmetric, every bidder is allowed to submit a nonincreasing continuous demand function in each round bidding, every bidder's valuation to per unit of the goods is independent private information, and if a bidder does not obtain the quantity he wants in former stage auction, he still have another opportunity to obtain some quantity in the later stage auction. For this mechanism, we explore the formation process and composition of equilibrium points in each stage auction, and discuss the optimal strategy selection for bidders, then give the detail steps and an application example to show how to implement this multi-stage sequential auction mechanism. The conclusions can be drawn that our auction mechanism is an efficient incentive mechanism, and can effectively reduce many underpricing equilibrium and can yield higher expected income than a single uniform price auction for the auctioneer. It also can avoid the occurrence of failure auction (equilibrium does not exist), and effectively extend and improve the traditional single stage uniform price auction mechanism.

Group-buying auction is a new business model in e-commerce. This auction has its own characteristics that make it distinct from other types of auctions. Customers' waiting time is an inherent attribute for group-buying auction. However, this attribute is rarely considered in the previous pricing models. Therefore, finding an appropriate pricing model for it seems to be of great importance. In this paper, with the help of game-theory concepts and according to each customer's waiting time in group-buying auction, a pricing model for a duopolistic market is proposed which takes into account both customers' and sellers' satisfaction. The pricing model shows that customers' awareness of Internet group-buying auction is so important and if it is lower than a boundary value, then the group-buying seller could not compete in the market. The model emphasizes on economies of scale as a significant factor in the success of the auction. The model also stresses the importance of gaining customers with lower product value in the group-buying auction.

We analyze a new auction format in which bidders pay a fee each time they increase the auction price. Bidding fees are the primary source of revenue for the seller but produce the same expected revenue as standard auctions (assuming risk-neutral bidders). If risk-loving preferences are incorporated in the model, expected revenue increases. Our model predicts a particular distribution of ending prices, which we test against observed auction data. The degree of fit depends on how unobserved parameters are chosen; in particular, a slight preference for risk has the biggest impact in explaining auction behavior, suggesting that pay-to-bid auctions are a mild form of gambling. This paper was accepted by Peter Wakker, decision analysis.

Assuming that bidders wish to acquire at most one item, this paper defines a polynomial time multi-item auction that locates the VCG prices in a finite number of iterations for any given starting prices. This auction is called the Vickrey–English–Dutch auction and it contains the Vickrey–English auction [Sankaran, J.K., 1994 . On a dynamic auction mechanism for a bilateral assignment problem. Math. Soc. Sci. 28, 143–150] and the Vickrey–Dutch auction [Mishra, D., Parkes, D., 2009 . Multi-item Vickrey–Dutch auctions. Games Econ. Behav. 66, 326–347] as special cases. By means of numerical experiments, it is showed that when the auctioneer knows the biddersʼ value distributions, the Vickrey–English–Dutch auction is weakly faster than the Vickrey–English auction and the Vickrey–Dutch auction in 89 percent and 99 percent, respectively, of the investigated problems. A greedy version of the Vickrey–English–Dutch auction is demonstrated to perform even better in the simulation studies.

Previous theoretical work has compared a private-value auction and posted-price market, and an affiliated-value auction and a posted-price market to determine the selling method preferred by sellers. Much less, however, is known about the seller’s preferred selling method when the buyers have a common value of the item. Our objective is to determine if a first-price auction or a posted-price market provides a seller with the larger expected revenue when buyers have a common value of the item being sold. An agent-based posted-price market and an agent-based first-price common-value auction with a reserve price are developed to compare these selling methods. Holding the buyers’ uncertainty about the value of the item constant, the seller prefers the posted-price market when the seller has no uncertainty about the item’s value. When the seller has an equal level of uncertainty as the buyers, the seller’s expected revenue for each market is similar. As the seller’s uncertainty increases beyond the level of the buyers’ uncertainty, the auction with a reserve price eventually becomes the preferred choice.

PurposeThe use of intentions to forecast behavior follows from the assumption that intentions are a strong indicator of an individual's actual purchase behavior. Yet most studies found the relationship between intent and actual behavior varies considerably. The purpose of this study was to explore how marketers should combine expressed measures of intention with other available data to forecast the probability of purchase and thus to set pricing decisions.Design/methodology/approachThrough a two‐stage approach, this study measured consumer psychographics and expressed purchase intention to predict actual purchase behavior using an online survey, the Vickrey auction method, and logistic regression.FindingsThe results found that individuals' attitudes and intentions are strong predictors of actual behavior. However, of particular interest are lower‐purchase‐intention individuals, who acted in line with their expressed willingness to pay more than individuals with higher purchase intentions.Research limitations/implicationsThe study was restricted to the investigation of one product. The model should be tested with different styles of wine products purchased on a regular basis.Practical implicationsMost product positioning research focuses on individuals who express high levels of purchase intention, positive attitudes, and positive values. However, basing a wine product's pricing on a high‐purchase‐intention group may lead to an overpriced product and a lack of follow‐through on the part of consumers.Originality/valueResults suggest a new method to approach purchase intention using a combination of actual purchase data and survey data.

Auctions have been shown to be able to tackle the problem of spectrum scarcity effectively, but most of existing works only focus on static scenarios. They cannot deal with the requests of spectrum users as they arrive and leave dynamically. Bidders can either cheat by bidding untruthfully or cheat about the arrival and departure time. In this paper, we model the radio spectrum allocation problem as a sealed-bid online combinatorial auction and propose a truthful mechanism called TRADE. TRADE is a truthful and an individual rational mechanism with polynomial time complexity. It can prevent bidders from cheating in the auction while achieving good bidder satisfaction, spectrum utilization, and social welfare. Copyright © 2013 John Wiley & Sons, Ltd.

Choice experiments and experimental auctions have become popular mechanisms for estimating willingness to pay (WTP). However, these methods have primarily been used for estimating WTP for single units of goods. We analyze the results from experimental auctions and choice experiments in the context of multiple quantities of a quasi-public good (animal welfare product). We show that the use of WTP values for a single unit of a product, a common practice in experimental valuation literature, can result in underestimation of aggregate demand. We use and compare open ended choice experiments (OECE), second price Vickrey auctions, and random Nth price auctions as mechanisms for valuing WTP. Our results also suggest that individual level demand estimates from OECE are less elastic than demand estimates from uniform price auctions. JEL classifications: C91, Q51, R22

Contains fulltext : 112206.pdf (Publisher’s version ) (Closed access) Contains fulltext : 112206-a.pdf (author's version ) (Open Access) The paper reports experimental data on the behavior in the first-price sealed-bid auction for a varying number of bidders when values and bids are private information. This feedback-free design is proposed for the experimental test of the one-shot game situation. We consider both within-subjects and between-subjects variations. In line with the qualitative risk neutral Nash equilibrium prediction, the data show that bids increase in the number of bidders. However, in auctions involving a small number of bidders, average bids are above, and in auctions involving a larger number of bidders, average bids are below the risk neutral equilibrium prediction. The quartile analysis reveals that bidding behavior is not constant across the full value range for a given number of bidders. On the high value quartiles, however, the average bid–value ratio is not different from the risk neutral prediction. The behavior is different when the winning bid is revealed after each repetition. 22 mei 2013 27 p.

In this paper, I study common-value auctions with a reserve price. First, I consider a static auction in which one bidder has perfect information about the value of the object and the other does not have any private information. Then I consider a dynamic auction in which the informed bidder obtains private information in two consecutive periods, while the other does not have any private information. In both auctions, I derive the optimal reserve price and establish conditions under which the exclusion principle fails. In addition, I compare the dynamic auction with the single-period auction and provide conditions under which one auction outperforms the other.

This paper proposes an iterative sealed-bid auction for selling multiple heterogeneous items to bidders interested in buying at most one item. It generalizes the single item bisection auction (Grigorieva et al. Econ Theory, 30:107---118, 2007) to the environment with multiple heterogeneous items. We focus on the case with two items for sale. We show that the auction elicits a minimal amount of information on preferences required to find the Vickrey---Clark---Groves outcome (Clarke, Public Choice, XI:17---33, 1971; Groves, Econometrica, 61:617---631, 1973; Vickrey, J Finance, 16:8---37, 1961), when there are two items for sale and an arbitrary number of bidders.

Our main goal is to abstract existing repeated sponsored search ad auction mechanisms which incorporate budgets, and study their equilibrium and dynamics. Our abstraction has multiple agents bidding repeatedly for multiple identical items (such as impressions in an ad auction). The agents are budget limited and have a value per item. We abstract this repeated interaction as a one-shot game, which we call budget auction, where agents submit a bid and a budget, and then items are sold by a sequential second price auction. Once an agent exhausts its budget it does not participate in the proceeding auctions. Our main result shows that if agents bid conservatively (never bid above their value) then there always exists a pure Nash equilibrium. We also study simple dynamics of repeated budget auctions, showing their convergence to a Nash equilibrium for two agents and for multiple agents with identical budgets.

In this paper, we study a cooperation-based dynamic spectrum leasing mechanism via multi-winner auction of multiple bands. Based on a second-price auction mechanism, the primary users independently conduct auctions to determine winners who are then granted access to leased bands and prices for those bands. Before auctions, each secondary user jointly chooses bands which they want to lease and generates bids for those bands with a limited transmit power budget. To this end, we determine the feasibility conditions for band selection and for power and time allocation. Further, we propose a low complexity bidding algorithm that iteratively selects a band and calculates the bid for that band. For the paying price among winners after auctions, a multi-objective optimization problem is considered. We derive Pareto optimal solutions and propose paying schemes that prioritize the objectives with pre-defined weighting rules. In addition, the payment and secondary utility are investigated with regard to the number of winners. Simulation results show that secondary users achieve significantly increased utility as more winners are chosen, while primary users are guaranteed a non-negative benefit from spectrum leasing. The power consumed by the secondary users for cooperative transmission is compared for the proposed paying schemes.

This paper presents a novel approach for efficient and convenient e-auction by comparing the performance between first-price and second-price sealed bid auction. This studied entry and bidding patterns in first-price and second-price sealed bid auction and documented a set of systematic effects on these two auctions. It is found that the first-price auction gives rise to larger levels of efficiency and revenue, but lower payoffs to the bidders. The latter finding is the second-price auction is a dominant strategy for a buyer to drop out of the bidding when the asking price reaches his or her valuation. This paper first demonstrates on the implementation of first-price and second-price sealed bid auction. Then it talks about the concerns about comparison between them.

We provide the generalization of Ausubel’s 2004 ascending bid auction to public good environments. Like its private good counterpart, the public good Ausubel auction encourages truthful revelation of preferences, is privacy preserving, and yields an equilibrium allocation that is outcome equivalent to the public good Vickrey auction. Other properties are not ideal in a public good setting. We discuss two such issues and propose an alternative dynamic auction which solves these problems.

This paper analyzes the problem of selecting a set of items whose prices are to be updated in the next iteration in so called simple ascending auctions with unit-demand bidders. A family of sets called “sets in excess demand” is introduced, and the main result demonstrates that a simple ascending auction always terminates at the minimum Walrasian equilibrium prices if and only if the selection belongs to this family.

Self-serving assets (SSAs) are a new interpretation of the intelligent product technology, set to transform product lifecycle management through automation. SSAs are engineering assets that autonomously monitor their health and expiry dates, search for suppliers, and negotiate with them, while they are still in use by the customer. The concept enables more timely and transparent supplier decision making while eliminating central database transactions and tedious manual effort. Autonomous self-interested agents that act on behalf of their stakeholders naturally give rise to an allocation problem, under the assumption of private information held by trade parties and capacity constrained suppliers providing imperfectly substitutable goods (ISGs). In this paper, we develop and compare three automated competition mechanisms, constructed as iterative games, and test them in the context of the aerospace service supply chain. The competition mechanisms include a prioritized selection mechanism, extended Vickrey, and reverse Dutch auctions. Our context drives us to seek mechanisms that will not only perform well in terms of economic theory, but also in terms of computational performance. Key findings are that extended Vickrey auctions can handle multiple criteria and provide higher market efficiency at lower computational cost, especially in small to medium markets. As scalability is an issue in large markets, the use of auctions is recommended only for complex high value assets or under uncertain market scenarios. As business-to-business (B2B) environments are becoming the norm for many global companies, our study aims to be exemplary to those who would like to implement automated auction mechanisms in highly complex environments.

Determining the level of payment and selecting participants are important but frequently neglected issues that affect social, economic and environmental performance of payment for environmental services (PES) programs. We use a pilot auction to address these issues in the context of a PES program in Tanzania's Uluguru Mountains. Two-hundred fifty-one local farmers submitted sealed bids in the auction. The results reveal the supply of PES contracts at different prices. Simulations using the auction results and household data show large tradeoffs between achieving cost effectiveness and maximizing participation by poor households. A monitoring survey 21 months after the auction found that most auction winners’ trees had survived, with performance uncorrelated to the farmer's poverty status or bid level. Although aspects of our auction design limit the strength of some of the conclusions we draw from the data, our study shows how pilot auctions can assist decision makers in estimating payment levels for PES contracts. Auction participants stated that the auction provided transparency in contract allocation and that winners felt peer pressure to comply with contracts, which suggest areas for future research regarding the potential advantages of using auctions to allocate PES contracts in developing countries.