Sequential Auctions with Financially Constrained Bidders PDF Download
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Author: Tim Harford
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 182
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Book Description
Author: Tim Harford
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 182
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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: Hanming Fang
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 21
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Author: Robert Zeithammer
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ISBN:
Category :
Languages : en
Pages : 0
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When capacity-constrained bidders have information about a good sold in a future auction, they need to take the information into account in forming today's bids. The capacity constraint makes even otherwise unrelated objects substitutes and creates an equilibrium link between future competition and current bidding strategy. This paper proves the existence and uniqueness of a symmetric pure-strategy equilibrium under mild conditions on the population distribution of valuations, characterizes general properties of the equilibrium bidding strategy, and provides a simple technique for numerically approximating the bidding strategy for arbitrary valuation distributions. The key property of the equilibrium is that almost all bidders submit positive bids in the first stage, thereby ensuring trade with probability one. Even bidders who strongly prefer the second object submit a positive bid in the first auction, because losing the first auction is informative about the remaining competitors who also lost, and losing with a low bid indicates that these competitors are quite strong. Because of the guaranteed trade, the sequential auction with information about future goods is a very efficient trading mechanism, achieving more than 98 percent of the potential gains from trade across a wide variety of settings.
Author: Gagan Pratap Ghosh
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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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: Yeon-Koo Che
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Author: Richard Engelbrecht-Wiggans
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 32
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Author: Gerard van der Laan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Yiu Wing Chan
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 88
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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.
