Entry And Competition Effects In First Price Auctions
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Entry And Competition Effects In First Price Auctions
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Author : Tong Li
language : en
Publisher:
Release Date : 2006
Entry And Competition Effects In First Price Auctions written by Tong Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
Motivated by several interesting features of the highway mowing auction data from Texas Department of Transportation (TDoT), we propose a two-stage procurement auction model with endogenous entry and uncertain number of actual bidders. Our entry and bidding models pro vide several interesting implications. For the first time, we show that even within an independent private value paradigm, as the number of potential bidders increases, bidders equilibrium bidding behavior may become less aggressive because the entry effect is always positive and may dominate the negative competition effect. We also show that it is possible that the relationship between the expected winning bid and the number of potential bidders is non-monotone decreasing as well. We then develop an empirical model of entry and bidding controlling for unobserved auction heterogeneity to analyze the data. The structural estimates are used to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost, as well as the savings for the government with regard to the procurement cost when the entry cost is reduced.
Procurement Auctions With Entry And Uncertain Number Of Actual Bidders
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Author : Xiaoyong Zheng
language : en
Publisher:
Release Date : 2005
Procurement Auctions With Entry And Uncertain Number Of Actual Bidders written by Xiaoyong Zheng and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
A Note On Auctions With Endogenous Participation
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Author : Flávio Marques Menezes
language : en
Publisher:
Release Date : 1996
A Note On Auctions With Endogenous Participation written by Flávio Marques Menezes and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Auctions categories.
In this paper, we study an auction where bidders only know the number of potential applicants. After seeing their values for the object, bidders decide whether or not to enter the auction. Players may not want to enter the auction since they have to pay participation costs. We characterize the optimal bidding strategies for both first- and second- price sealed-bid auction when participation is endogenous. We show that only bidders with values greater than a certain cut-off point will bid in these auctions. In this context, both auctions generate the same expected revenue. We also show that, contrarily to the predictions of the fixed-n literature, the seller's expected revenue may decrease when the number of potential participants increases. In addition, we show that it is optimal for the seller to charge an entry fee, which contrasts greatly with results from the existing literature on auctions with entry.
Entry In First Price Auctions With Signaling
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Author : Olivier Bos
language : en
Publisher:
Release Date : 2022
Entry In First Price Auctions With Signaling written by Olivier Bos and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.
We study the optimal entry fee in a symmetric private value first-price auction with signaling, in which the participation decisions and the auction outcome are used by an outside observer to infer the bidders' types. We show that this auction has a unique fully separating equilibrium bidding function. When the bidders' sensibility for the signaling concern is sufficiently strong, the expected revenue maximizing entry fee is the maximal fee that guarantees full participation. The larger is the bidder's sensibility, the higher is the optimal participation.
Putting Auction Theory To Work
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Author : Paul Milgrom
language : en
Publisher: Cambridge University Press
Release Date : 2004-01-12
Putting Auction Theory To Work written by Paul Milgrom and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-01-12 with Business & Economics categories.
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.
First Price Auctions With General Information Structures
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Author : Dirk Bergemann
language : en
Publisher:
Release Date : 2017
First Price Auctions With General Information Structures written by Dirk Bergemann and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Auctions categories.
We explore the impact of private information in sealed-bid first-price auctions. For a given symmetric and arbitrarily correlated prior distribution over values, we characterize the lowest winning-bid distribution that can arise across all information structures and equilibria. The information and equilibrium attaining this minimum leave bidders indifferent between their equilibrium bids and all higher bids. Our results provide lower bounds for bids and revenue with asymmetric distributions over values. We also report further characterizations of revenue and bidder surplus including upper bounds on revenue. Our work has implications for the identification of value distributions from data on winning bids and for the informationally robust comparison of alternative bidding mechanisms.
Putting Auction Theory To Work
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Author : Paul Robert Milgrom
language : en
Publisher: Cambridge University Press
Release Date : 2004-01-12
Putting Auction Theory To Work written by Paul Robert Milgrom and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-01-12 with Business & Economics categories.
Table of contents
Common Value Auctions And The Winner S Curse
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Author : John H. Kagel
language : en
Publisher: Princeton University Press
Release Date : 2021-04-13
Common Value Auctions And The Winner S Curse written by John H. Kagel and has been published by Princeton University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-04-13 with Business & Economics categories.
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.
The Effect Of Competition In Sealed Bid Auctions
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Author : Donald J. Meyer
language : en
Publisher:
Release Date : 1983
The Effect Of Competition In Sealed Bid Auctions written by Donald J. Meyer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1983 with Auctions categories.
Impact Of Valuation Ranking Information On Bidding In First Price Auctions
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Author : A. Alexander Elbittar
language : en
Publisher:
Release Date : 2009
Impact Of Valuation Ranking Information On Bidding In First Price Auctions written by A. Alexander Elbittar and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
Landsberger et al. (2001) identified optimal bidder behavior in first-price private-value auctions when the ranking of valuations is common knowledge, and derived comparative-statics predictions regarding the auctioneer's expected revenue and the efficiency of the allocation. The experiment reported here tests the behavioral components of these comparative-statics predictions. The results support the prediction that buyers are inclined to bid more aggressively when they learn they have the low value. Contrary to the theory, buyers are inclined to bid less when they learn they have the high value. Once information is revealed, bidders tend to move toward better responses, exploiting new economic opportunities. Consistent with theory, the overall proportion of efficient allocations is lower than in the first-price auction before information is revealed. But as a result of high-value bidders decreasing their bids, the expected revenue does not increase on a regular basis, contrary to the theory's predictions.