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Author: Mark Isaac
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This article uses laboratory data from a series of first-price (FP) and second-price (SP) sealed bid auctions in which the number of bidders is unknown to test for possible deviations of individual behavior from theory and study the source of heterogeneity in bidding. In SP auctions we find a substantial amount of coincidence with theory. We observe systematic deviations from risk neutral bidding in FP auctions and show theoretically that these deviations are consistent with risk averse preferences. We find essentially no heterogeneity in bidding in SP auctions where risk preferences and the number of bidders do not affect the optimal bid, while in the FP auctions heterogeneity in bidding persists with experience. We find that heterogeneity in bidding in FP auctions is consistent with heterogeneity in risk preferences, the attempt to count the number of bidders in the auction, and bidder specific noise.
Author: Mark Isaac
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This article uses laboratory data from a series of first-price (FP) and second-price (SP) sealed bid auctions in which the number of bidders is unknown to test for possible deviations of individual behavior from theory and study the source of heterogeneity in bidding. In SP auctions we find a substantial amount of coincidence with theory. We observe systematic deviations from risk neutral bidding in FP auctions and show theoretically that these deviations are consistent with risk averse preferences. We find essentially no heterogeneity in bidding in SP auctions where risk preferences and the number of bidders do not affect the optimal bid, while in the FP auctions heterogeneity in bidding persists with experience. We find that heterogeneity in bidding in FP auctions is consistent with heterogeneity in risk preferences, the attempt to count the number of bidders in the auction, and bidder specific noise.
Author: Decision Sciences Institute. Annual Meeting
Publisher: Pearson Education
ISBN: 0133925374
Category : Business & Economics
Languages : en
Pages : 400
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Book Description
Decision science offers powerful insights and techniques that help people make better decisions to improve business and society. This new volume brings together the peer-reviewed papers that have been chosen as the "best of the best" by the field's leading organization, the Decision Sciences Institute. These papers, authored by respected decision science researchers and academics from around the world, will be presented at DSI's 45th Annual Meeting in Tampa, Florida in November 2014. The first book of papers ever assembled by DSI, this volume describes recent methods and approaches in the decision sciences, with a special focus on how accelerating technological innovation is driving change in the ways organizations and individuals make decisions. These papers offer actionable insights for decision-makers of all kinds, in business, public policy, non-profit organizations, and beyond. They also point to new research directions for academic researchers in decision science worldwide.
Author: Youxin Hu
Publisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 104
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Book Description
Abstract: Standard literature on auctions considers isolated markets with bidders that are ex ante identical and independent. My dissertation research considers the behavior of bidders and sellers when they take into account other auctions and bidders' relative roles outside of a given auction. I further extend this investigation through classroom experiments. In the first chapter, I study bidders' optimal strategies under negative externalities (i.e., the auction may incur losses (instead of zero payoffs) to the losing bidders). I construct a model of auction with three bidders. One bidder is special in the sense that if he wins, both of the other bidders will incur a loss; the other two bidders are regular in the sense that as in a traditional auction, if one of them wins, the losing bidders will receive zero payoffs. Intuitively one expects regular bidders to bid more aggressively than normal to avoid the loss. However, I find that in an ascending clock auction, in equilibrium regular bidders bid less aggressively and quit before reaching their private values. This occurs because a regular bidder may have to bid above his value in order to win against the special bidder and thus risks negative profit by bidding aggressively. Since both regular bidders avoid the externality if either wins, there is a free riding incentive. Despite free riding, in most cases the clock auction is ex post efficient However, in first-price sealed bid auctions free riding and aggressive bidding incentives are simultaneous, so ex post efficiency is less frequent. I also conducted classroom experiments which suggest that bidders more often exhibit aggressive bidding rather than free riding in an ascending clock auction; furthermore, I show that in first-price sealed bid auctions, regular bidders bid more aggressively than the special bidder, indicating aggressive bidding incentives dominate free riding incentives. In the second chapter, I construct an auction model in which both number of bidders and sellers' reserve prices are endogenously determined, and estimate the value distribution among eBay bidders. I assume each bidder has a choice of auctions with different reserve prices and other auction specific factors (seller's reputation, shipping cost, auction duration, etc.). I show that in equilibrium, 1) each bidder must be indifferent to entry in any auction, and 2) each seller's reserve price must maximize expected revenue given auction structure and bidder entry behavior, which jointly determines the equilibrium number of bidders in each auction. Few theoretical works have been done to find the positive optimal reserve price when the number of bidder is endogenous. And previous empirical work usually uses observed bids to estimate bidders' value distribution and take sellers' choice (e.g., reserve prices) as exogenous. Based on the equilibrium relationship described above, my model allows estimation of bidders' value distribution not only from observed bids, but also from the number of bidders and reserve prices. To apply this structural estimation method, I use eBay digital camera auction data to estimate bidders' value distribution from bid observations and reserve prices.
Author: Takayuki Ito
Publisher: Springer
ISBN: 3642031900
Category : Computers
Languages : en
Pages : 220
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Book Description
Complex Automated Negotiations have been widely studied and are becoming an important, emerging area in the field of Autonomous Agents and Multi-Agent Systems. In general, automated negotiations can be complex, since there are a lot of factors that characterize such negotiations. These factors include the number of issues, dependency between issues, representation of utility, negotiation protocol, negotiation form (bilateral or multi-party), time constraints, etc. Software agents can support automation or simulation of such complex negotiations on the behalf of their owners, and can provide them with adequate bargaining strategies. In many multi-issue bargaining settings, negotiation becomes more than a zero-sum game, so bargaining agents have an incentive to cooperate in order to achieve efficient win-win agreements. Also, in a complex negotiation, there could be multiple issues that are interdependent. Thus, agent’s utility will become more complex than simple utility functions. Further, negotiation forms and protocols could be different between bilateral situations and multi-party situations. To realize such a complex automated negotiati on, we have to incorporate advanced Artificial Intelligence technologies includes search, CSP, graphical utility models, Bays nets, auctions, utility graphs, predicting and learning methods. Applications could include e-commerce tools, decisionmaking support tools, negotiation support tools, collaboration tools, etc. These issues are explored by researchers from different communities in Autonomous Agents and Multi-Agent systems. They are, for instance, being studied in agent negotiation, multi-issue negotiations, auctions, mechanism design, electronic commerce, voting, secure protocols, matchmaking & brokering, argumentation, and co-operation mechanisms. This book is also edited from some aspects of negotiation researches including theoretical mechanism design of trading based on auctions, allocation mechanism based on negotiation among multi-agent, case-study and analysis of automated negotiations, data engineering issues in negotiations, and so on.
Author: Carl A. Kogut
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 306
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Book Description
Author: John H. Kagel
Publisher: Princeton University Press
ISBN: 1400830133
Category : Business & Economics
Languages : en
Pages : 424
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Book Description
An invaluable account of how auctions work—and how to make them work Few forms of market exchange intrigue economists as do auctions, whose theoretical and practical implications are enormous. John Kagel and Dan Levin, complementing their own distinguished research with papers written with other specialists, provide a new focus on common value auctions and the "winner's curse." In such auctions the value of each item is about the same to all bidders, but different bidders have different information about the underlying value. Virtually all auctions have a common value element; among the burgeoning modern-day examples are those organized by Internet companies such as eBay. Winners end up cursing when they realize that they won because their estimates were overly optimistic, which led them to bid too much and lose money as a result. The authors first unveil a fresh survey of experimental data on the winner's curse. Melding theory with the econometric analysis of field data, they assess the design of government auctions, such as the spectrum rights (air wave) auctions that continue to be conducted around the world. The remaining chapters gauge the impact on sellers' revenue of the type of auction used and of inside information, show how bidders learn to avoid the winner's curse, and present comparisons of sophisticated bidders with college sophomores, the usual guinea pigs used in laboratory experiments. Appendixes refine theoretical arguments and, in some cases, present entirely new data. This book is an invaluable, impeccably up-to-date resource on how auctions work--and how to make them work.
Author: Takashi Hayashiy
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
Overbidding, bidding more than risk-neutral Bayesian Nash Equilibrium, is a widely observed phenomenon in virtually all experimental auctions. The scholars within the auction literature propose the risk-averse preference model to explain overbidding structurally. However, the risk-averse preference model predicts underbidding in such important classes of auctions as all-pay auctions. To solve this discrepancy, we construct a structural model of bidding behavior in sealed-bid auctions, one in which bidders may regret their decisions. Our model nests both risk-averse and regret-averse attitudes and aims to explain overbidding in a wider class of auctions. We first derive equilibrium first-order conditions, which are used for estimation and calibration analyses, and show monotonic increasing properties of equilibrium bidding functions. Second, we carry out structural estimation and calibration analyses based on experimental data from Kagel and Levin (1993) and Noussair and Silver (2006). With these structurally estimated parameters, we test the significance of bidders' risk-averse and regret-averse attitudes. The estimation results show that bidders exhibit weak risk-averse (close to risk-neutral) and strong regret-averse attitudes. Furthermore, regret-averse attitudes are significant when bidders anticipate losing. Calibration results demonstrate that our risk- and regret-averse model can explain overbidding across all of the above IPV auctions. Third, we simulate our model with the estimated parameters and obtain revenue rankings numerically. This allows us to confirm the revenue supremacy in all-pay auctions reported in experimental auction literature. We discuss extensions to asymmetric and Common-Value (CV) auctions in our online Appendix.
Author: Paul Pezanis-Christou
Publisher:
ISBN:
Category :
Languages : en
Pages : 35
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We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.
Author: Rebecca Catherine Elskamp
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This thesis contains three essays on the topic of bidding behaviour in multi-unit auctions. The first essay develops and experimentally tests multi-unit auction theory to identify the effects of "scaling up" multi-unit auction environments on individual bidding behaviour. A uniquely tractable environment is developed that leads to the construction of uniform auctions of different scales, where the prediction is that risk neutral bidders' bids on the last unit they demand are independent of scale. Two main effects were observed in the experimental data. Regardless of scale, bidders were found to bid more aggressively than predicted by the theory. Secondly, small scale effects were observed, as bids were more aggressive in the small scale relative to the larger scale treatment. The theoretical consequences of risk aversion, joy of winning, and anticipated regret are analyzed to explain these deviations from predictions. The second essay provides empirical evidence on how economic agents converge to optimality. Learning direction theory is applied to bidding behaviour from the Ontario dairy quota auction, following a change in pricing rule from uniform to discriminatory. Two dimensions of bidding behaviour are examined at the individual bidder level, bid prices and number of price-quantity bid pairs. Adjustments in bidding behaviour are broadly consistent with the ex-post rationality. Experience acquired under the discriminatory pricing rule is found to have diminishing effects on adjustments made to bidding behaviour, consistent with bidders converging towards optimality. The third essay examines the effect of two simultaneous policy changes, implemented in the Ontario dairy quota auction, to determine whether these changes were successful in achieving performance goals. Results of a series of regression models indicate that these two policy changes had no effect on clearing prices. Rather, these two policy changes were found to significantly reduce revenue from quantity purchased, total quantity transferred and total quantity offered. The combination of a significant reduction in bid prices and individual quantity demanded, paralleled by an increase in individual quantity offered appears to have been the underlying mechanisms, in terms of individual bidding/offering behaviour, through which the these two policies failed to meet performance goals.
Author: Kjell G. Nyborg
Publisher:
ISBN:
Category : Government securities
Languages : en
Pages : 54
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