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Author: Andreas Lange
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages :
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Book Description
Auction theory represents one of the richest areas of research in economics over the past three decades. Yet, whether, and to what extent, the introduction of secondary resale markets influences bidding behavior in sealed bid first-price auctions remains under researched. This study begins by examining field data from a unique data set that includes nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia from 1996-2000. In comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not, we find evidence that is consistent with theory. Critical evaluation of the reduced-form bidding model, however, reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types. We therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted theoretical effect. We find that while it does have the predicted effect, a theoretical model based on risk-averse bidders explains the overall data patterns more accurately than a model based on risk-neutral bidders. Beyond testing theory, the paper highlights the inferential power of combining naturally occurring data with laboratory data -- National Bureau of Economic Research web site.
Author: Andreas Lange
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages :
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Book Description
Auction theory represents one of the richest areas of research in economics over the past three decades. Yet, whether, and to what extent, the introduction of secondary resale markets influences bidding behavior in sealed bid first-price auctions remains under researched. This study begins by examining field data from a unique data set that includes nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia from 1996-2000. In comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not, we find evidence that is consistent with theory. Critical evaluation of the reduced-form bidding model, however, reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types. We therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted theoretical effect. We find that while it does have the predicted effect, a theoretical model based on risk-averse bidders explains the overall data patterns more accurately than a model based on risk-neutral bidders. Beyond testing theory, the paper highlights the inferential power of combining naturally occurring data with laboratory data -- National Bureau of Economic Research web site.
Author: Andreas Lange
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 59
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Book Description
Auction theory is one of the richest areas of research in economics over the past three decades. Yet whether and to what extent the introduction of secondary resale markets influences bidding behavior in sealed bid first-price auctions remains under researched. This study begins by developing theory to explore auctions with resale when private values are uncertain. We put our theory to the test by examining both field data and experimental data from the lab. Our field data are from a unique data set that includes nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia from 1996-2000. In comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not, we find evidence that is consistent with our theoretical predictions. Critical evaluation of the reduced-form bidding model, however, reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types. We therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted effect. We find that while it does have the predicted effect, a theoretical model based on risk-averse bidders explains the overall data patterns more accurately than a model based on risk-neutral bidders. More generally, the paper highlights the inferential power of combining naturally occurring data with laboratory data.
Author: Philip A. Haile
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Author: Mehmet Oğuz Karahan
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
We study the equilibrium of second-price auctions with resale when the value of the asset is subject to future state uncertainty. We assume bidders differ in their sensitivities toward each state, resulting in alternating orderings of use values. In both complete and incomplete information settings, equilibrium bids are higher than expected use values, equilibrium bidding functions are non-monotone and convex, with a minimum at the median of type distribution. Under incomplete information, the winner of the auction is unable to infer the type of losing bidder with certainty, which can result in scenarios where she cannot capture all surplus.
Author: Krista Jabs Saral
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Theoretically, bids will be higher if bidders are able to mitigate this downside loss through some form of limited liability. This essay examines a second price auction with uncertain private values in three environments: market-based limited liability, statutory limited liability, and full liability. Market-based limited liability is induced through inter-bidder resale following the auction. Statutory limited liability is created through a default option in the event that a bidder would make a loss. Bids are theoretically shown to be higher under resale, and this result is confirmed in the experimental results. The default option was varied between a high and low penalty. Bid are also theoretically higher under statutory default, but this result only empirically holds for low penalty default, which results in the highest bids. Revenue is highest under a market-based resale limited liability environment, and lowest in the low penalty default treatment given the high rate of default.
Author: Blake Dean LeBaron
Publisher:
ISBN:
Category : Bootstrap (Statistics)
Languages : en
Pages : 0
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Book Description
Author: R. Mark Issac
Publisher: Emerald Group Publishing
ISBN: 1849507686
Category : Social Science
Languages : en
Pages : 258
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Book Description
Deals with philanthropy. This title includes major themes in which the tools of choice, endogeneity, and self-selection are employed such as: What increases or decreases charitable activity? and How do organizational and managerial issues affect the performance of non-profit organizations?
Author: Paul Milgrom
Publisher: Cambridge University Press
ISBN: 1139449168
Category : Business & Economics
Languages : en
Pages : 378
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Book Description
This book provides a comprehensive introduction to modern auction theory and its important new applications. It is written by a leading economic theorist whose suggestions guided the creation of the new spectrum auction designs. Aimed at graduate students and professionals in economics, the book gives the most up-to-date treatments of both traditional theories of 'optimal auctions' and newer theories of multi-unit auctions and package auctions, and shows by example how these theories are used. The analysis explores the limitations of prominent older designs, such as the Vickrey auction design, and evaluates the practical responses to those limitations. It explores the tension between the traditional theory of auctions with a fixed set of bidders, in which the seller seeks to squeeze as much revenue as possible from the fixed set, and the theory of auctions with endogenous entry, in which bidder profits must be respected to encourage participation.
Author: Vijay Krishna
Publisher: Academic Press
ISBN: 0080922937
Category : Business & Economics
Languages : en
Pages : 337
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Book Description
Auction Theory, Second Edition improves upon his 2002 bestseller with a new chapter on package and position auctions as well as end-of-chapter questions and chapter notes. Complete proofs and new material about collusion complement Krishna’s ability to reveal the basic facts of each theory in a style that is clear, concise, and easy to follow. With the addition of a solutions manual and other teaching aids, the 2e continues to serve as the doorway to relevant theory for most students doing empirical work on auctions. Focuses on key auction types and serves as the doorway to relevant theory for those doing empirical work on auctions New chapter on combinatorial auctions and new analyses of theory-informed applications New chapter-ending exercises and problems of varying difficulties support and reinforce key points
Author: Isabelle Brocas
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 30
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Book Description
We conduct a laboratory experiment of second-price sealed bid auctions of a common value good with two bidders. Bidders face three different types of information: common uncertainty (unknown information), private information (known by one bidder) and public information (known by both bidders), and auctions differ on the relative importance of these three types of information. We find that subjects differentiate insufficiently between private and public information and deviate from the theoretical predictions with respect to all three types of information. There is under-reaction to both private and public information and systematic overbidding in all auctions above and beyond the standard winner's curse. The Cursed Equilibrium and Level-k models successfully account for some features of the data but others remain unexplained.
