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Author: Gagan Pratap Ghosh
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 81
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Book Description
I derive various qualitative features of this equilibrium, among which are: (1) under mild assumptions, there always exist bidder-types who submit unequal bids in equilibrium, (2) the equilibrium is monotonic in the sense that bidders with higher valuations prefer more unequal splits of their budgets than bidders with lower valuations and the same budget-level. With a formal theory in place, I carry out a quantitative exercise, using data from the 1970 OCS auction. I show that the model is able to match many aspects of the data. (1) In the data, the number of tracts bidders submit bids on is positively correlated with budgets (an R2 of 0.84), even though this relationship is non-monotonic; my model is able to capture this non-monotonicity, while producing an R2 of 0.89 (2) In the data, the average number of bids per tract is 8.21; for the model, this number is 10.09. (3) Auction revenue in the data was $1.927 billion; the model produced a mean revenue of $1.944 billion.
Author: Gagan Pratap Ghosh
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 81
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Book Description
I derive various qualitative features of this equilibrium, among which are: (1) under mild assumptions, there always exist bidder-types who submit unequal bids in equilibrium, (2) the equilibrium is monotonic in the sense that bidders with higher valuations prefer more unequal splits of their budgets than bidders with lower valuations and the same budget-level. With a formal theory in place, I carry out a quantitative exercise, using data from the 1970 OCS auction. I show that the model is able to match many aspects of the data. (1) In the data, the number of tracts bidders submit bids on is positively correlated with budgets (an R2 of 0.84), even though this relationship is non-monotonic; my model is able to capture this non-monotonicity, while producing an R2 of 0.89 (2) In the data, the average number of bids per tract is 8.21; for the model, this number is 10.09. (3) Auction revenue in the data was $1.927 billion; the model produced a mean revenue of $1.944 billion.
Author: Jean-Pierre Benoit
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
A seller with two objects faces a group of bidders who are subject to budget constraints. The objects have common values to all bidders, but need not be identical and may be either complements or substitutes. In a simple complete information setting we show: (1) if the objects are sold by means of a sequence of open ascending auctions, then it is always optimal to sell the more valuable object first; (2) the sequential auction yields more revenue than the simultaneous ascending auction used recently by the FCC if the discrepancy in the values is large, or if there are significant complementarities; (3) a hybrid simultaneous-sequential form is revenue superior to the sequential auction; and (4) budget constraints arise endogenously.
Author: Sebastian Schwenen
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
Author: Dolf Talman
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
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Book Description
An auctioneer wishes to sell several heterogeneous indivisible items to a group of potential bidders. Each bidder has valuations over the items but faces a budget constraint and may therefore not be able to pay up to his valuations. In such markets, a competitive equilibrium typically fails to exist. We develop a dynamic auction and prove that the auction always finds a core allocation in finitely many rounds. The core allocation consists of an assignment of the items and its associated supporting price vector.
Author: Sandro Brusco
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
We identify and analyze three distinct effects arising from potentially binding budget constraints in multi-unit ascending auctions. First, binding budgets clearly reduce the level of competition among bidders. Second, budget constraints may at the same time make it difficult to sustain collusive equilibria when bidders lack sufficient resources to punish defectors.Third, the mere possibility, even if arbitrarily small, of binding budget constraints can reduce competition substantially because bidders can pretend to be constrained, even if they are not.In this cases, measures restricting the participation of low-budget bidders, e.g. reserve prices, can increase social welfare.
Author: Gerardus Laan
Publisher:
ISBN:
Category :
Languages : en
Pages : 27
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Book Description
Author: Torben Hagerup
Publisher: Springer Science & Business Media
ISBN: 3540223398
Category : Computers
Languages : en
Pages : 517
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Book Description
This book constitutes the refereed proceedings of the 9th Scandinavian Workshop on Algorithm Theory, SWAT 2004, held in Humlebaek, Denmark in July 2004. The 40 revised full papers presented together with an invited paper and the abstract of an invited talk were carefully reviewed and selected from 121 submissions. The papers span the entire range of theoretical algorithmics and applications in various fields including graph algorithms, computational geometry, scheduling, approximation algorithms, network algorithms, data storage and manipulation, bioinformatics, combinatorics, sorting, searching, online algorithms, optimization, etc.
Author: Gagan Pratap Ghosh
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We study an auction game in which two units of a good are sold via two second price auctions sequentially. Bidders value the units identically and have one of two budget levels, high or low. Bidders do not know each others budgets. We show that this game has a unique symmetric equilibrium in which the probabilistic presence of high budget bidders can make bidders bid more aggressively in the first auction, thus lowering prices in the second. As a result if the possibility of competition from high budget bidders is large, then the equilibrium strategies generate declining prices.
Author: Minjie Shao
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 91
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Book Description
This dissertation consists of two essays on the topic of bidding in multi-unit common value auction. Essay one examines the role of capacity constraint on the auction results and bidding behavior. We consider a general case where bidders are unconstrained, and a second setting where bidders are capacity constrained. We document downward sloping demand curves for individual bidders. Bidders shade their bids by submitting quantity-price pairs and spreading their bids. The winner's curse is strong in the unconstrained treatment, but we find no evidence of the winner's curse when bidding constraints are imposed. Unconstrained bidders shade bids significantly more and their quantity-weighted prices are much lower than those in the constrained treatment. Interacting with the information structure, the capacity constraint has a significant impact on the auction results including the market clearing price, market efficiency, and the degree of market concentration. We provide evidence that efficient price discovery in multi-unit auctions with diverse information is possible, but careful attention to auction design will make this outcome more likely. Essay two examines how the introduction of a noncompetitive bidding option affects outcomes in a multi-unit uniform-price auction. The experimental design incorporates many of the characteristics of the markets that pertain to the issuance of new equity securities. Important features of the bidding environment include endogenous bidder entry, costly information acquisition, bidders that differ by capacity constraint, and substantial uncertainty with respect to the intrinsic value. We use a standard uniform-price auction as our baseline setting where only competitive bids are accepted. Our results show that introducing the noncompetitive bidding option improves auction performance by increasing revenue and reducing price error. Underpricing is found in both treatments, but is less severe in the presence of the noncompetitive bidding option. The incorporation of this option significantly increases both the small bidder participation rate and allocation, and reduces the incentive for small bidders to free ride by submitting extremely high bids. Under both treatments, information acquisition increases large bidders' profits but proves unprofitable for small bidders, and pricing accuracy is increasing in the rate of information acquisition.
Author: Phuong Le
Publisher:
ISBN:
Category :
Languages : en
Pages : 27
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Book Description
This paper studies combinatorial auctions with budget-constrained bidders from a mechanism design perspective. I search for mechanisms that are incentive compatible, individually rational, symmetric, non-wasteful and non-bossy. First focusing on the greedy domain, in which any increase in a bidder's valuation always exceeds his budget, I derive the unique mechanism, called the Iterative Second Price Auction. For the general domain, however, no such mechanism exists.
