Essays On Multi Unit Auctions
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Bidding Behaviour In Multi Unit Auctions
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Author : Rebecca Catherine Elskamp
language : en
Publisher:
Release Date : 2016
Bidding Behaviour In Multi Unit Auctions written by Rebecca Catherine Elskamp and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
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.
Essays On Multi Unit Auctions
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Author : Jinsoo Bae (Ph. D. in economics)
language : en
Publisher:
Release Date : 2020
Essays On Multi Unit Auctions written by Jinsoo Bae (Ph. D. in economics) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Auctions categories.
Chapter 3 studies a pro-competitive effect of joint bidding in multi-unit uniform price auctions where bidders have private values and demand different quantities of units. I analyze a simple model with three identical items for sale, two small bidders each demanding a single unit, and a big bidder demanding two units. I show that joint bidding of the two small bidders, which recovers the symmetry of bidders, enhances competition among the bidders and increases efficiency and revenue of the auction.
Two Essays On Bidding In Multi Unit Common Value Auctions
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Author : Minjie Shao
language : en
Publisher:
Release Date : 2010
Two Essays On Bidding In Multi Unit Common Value Auctions written by Minjie Shao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Auctions categories.
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.
Essays In Multi Unit Auction Theory
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Author : David Lloyd McAdams
language : en
Publisher:
Release Date : 2001
Essays In Multi Unit Auction Theory written by David Lloyd McAdams and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Auctions categories.
Essays On Empirical Analysis Of Multi Unit Auctions Impacts Of Financial Transmission Rights On The Restructured Electricity Industry
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Author : Hailing Zang
language : en
Publisher:
Release Date : 2005
Essays On Empirical Analysis Of Multi Unit Auctions Impacts Of Financial Transmission Rights On The Restructured Electricity Industry written by Hailing Zang 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.
This dissertation uses recently developed empirical methodologies for the study of multi-unit auctions to test the impacts of Financial Transmission Rights (FTRs) on the competitiveness of restructured electricity markets. FTRs are a special type of financial option that hedge against volatility in the cost of transporting electricity over the grid. Policy makers seek to use the prices of FTRs as market signals to incentivize efficient investment and utilization of transmission capacity. However, prices will not send the correct signals if market participants strategically use FTRs. This dissertation uses data from the Texas electricity market to test whether the prices of FTRs are efficient to achieve such goals. The auctions studied are multiunit, uniform-price, sealed-bid auctions. The first part of the dissertation studies the auctions on the spot market of the wholesale electricity industry. I derive structural empirical models to test theoretical predictions as to whether bidders fully internalize the effect of FTRs on profits into their bidding decisions. I find that bidders are learning as to how to optimally bid above marginal cost for their inframarginal capacities. The bidders also learn to bid to include FTRs into their profit maximization problem during the course of the first year. But starting from the second year, they deviated from optimal bidding that includes FTRs in the profit maximization problems. Counterfactual analysis show that the primary effect of FTRs on market outcomes is changing the level of prices rather than production efficiency. Finally, I find that in most months, the current allocations of FTRs are statistically equivalent to the optimal allocations. The second part of the dissertation studies the bidding behavior in the FTR auctions. I find that FTRs' strategic impact on the FTR purchasing behavior is significant for large bidders - firms exercising market power in the FTR auctions. Second, trader forecasts future FTR credit very accurately while large generators' forecasts of future FTR credit tends to be biased upward. Finally, The bid shading patterns are consistent with theoretical predictions and support the existence of common values.
Three Essays On Auction Markets
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Author : Nicholas James Shunda
language : en
Publisher:
Release Date : 2008
Three Essays On Auction Markets written by Nicholas James Shunda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
Essays In Industrial Organization Entry In Multi Object Auctions And Freemium Packages In Two Sided Markets
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Author : Renato Zaterka Giroldo
language : en
Publisher:
Release Date : 2019
Essays In Industrial Organization Entry In Multi Object Auctions And Freemium Packages In Two Sided Markets written by Renato Zaterka Giroldo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
In the first two chapters of this dissertation, I study the design of multi-object auctions. Using a large data set from the Brazilian public procurement sector, I show evidence that entry is costly and that the mix of products being auctioned off is a first-order effect to understand firm participation. In the first chapter, I find evidence that the data is consistent with a theory of selection. The average entrant has a higher product match with the session, and they are closer to auction locations. Distance affects entry decisions negatively: a 1 unit (100km) increase in the distance to the auction location lowers the odds ratio for entry 0.91 times. At the same time, an additional auction in the set of potential auctions of a firm increases the odds for entry 1.62 times. In terms of variable costs, a 1% increase in the distance to the auction location increases bid by 0.4% to 3.3%. There are also gains of scale in terms of the size of the contracts: a 1% increase in the contract quantity for a given product increases bids by 0.64% to 0.76%. The main force responsible for lowering procurement costs is the presence of additional bidders. I find that an extra bidder can lower costs between 21.2% and 32.4%. These results motivate and feed into the structural model presented in chapter 2. In the second chapter, I continue to analyze this market with the focus on estimating entry costs and answering policy questions. To do so, I build a novel model of endogenous entry in multi-object auction sessions that allows me to disentangle two forces that affect entry decisions: entry costs, and the menu of items of a given session. The model has two stages. In the first stage, firms decide whether to enter an auction session and pay a fixed cost after observing an imperfect signal of their true cost. In the second stage, both the items for which they can bid and their costs are realized, and the auction takes place. I focus the analysis on type symmetric equilibria, where bidders of the same type follow the same entry strategy. In equilibrium, marginal bidders make zero profits. This condition allows me to link the unobserved entry costs to the observed bid behavior of entrants. Having derived the equilibrium of the model, I estimate model fundamentals and turn to policy questions. The estimates provide evidence that entry is more attractive to local firms. I find that their cost distribution stochastically dominates the one from non-local firms. Moreover, conditioned on the number of items a firm can participate in, non-local firms face between 3.9% to 6.5% higher entry costs than local firms. I focus on two counterfactual simulations. In the fully efficient scenario, where firms do not incur any entry costs, I find that procurement costs would be lowered by 22.5% to 40.1%. These are bounds on the maximum cost savings and also quantifies the degree of inefficiency present in this market. The second counterfactual is a partially efficient scenario, where non-local firms face the same entry costs as local firms. This analysis focuses on a selected equilibrium where firms enter the sessions sequentially. Firms are sorted according to a lexicographic order which is determined by the strength of their signal, number of items, and firm type (non-local/local). I find that procurement costs would be lowered by 2.8% to 2.9%. Thus, on this type of equilibrium and by holding on-site auctions, the government indirectly sacrificed some efficiency to the benefit of local firms. In the third chapter, I study the pricing of platforms that offer consumers the choice between a free package, in which consumers are exposed to advertising, and a premium package, in which they pay to not be exposed to advertisements. I characterize its profit-maximizing and Pigouvian pricing, which allows me to analyze the degree to which the platform incorporates consumers' distaste for advertising in its pricing scheme, as well as the trade-offs that emerge between the free and paid packages. The results contribute to the discussion of consumers' overexposure to advertising when platforms behave as a social planner and maximize their value.
Essays On Multi Item Auctions
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Author : Rao Fu
language : en
Publisher:
Release Date : 2011
Essays On Multi Item Auctions written by Rao Fu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
In this dissertation, I explore bidders' behavior in multiple auctions which are conducted sequentially or simultaneously. The first and the second chapters examine buyers' bidding behaviors in an environment of multiple simultaneous auctions and show that the wildly-used assumption of proxy bidding is inappropriate in the multiple auction setting. The first chapter proposes two models which try to describe online auction platforms. One model has a fixed ending time and the other does not. I show that incremental bidding strategy can arise out of equilibrium and weakly dominate the proxy bidding strategy. Late bidding is also discussed. I use the data I collect from eBay to test these theoretical predictions in the second chapter. The estimation results basically support the theory part. Incremental bidders who switch among different auctions are more likely to win and have higher payoffs than proxy bidders. The third essay studies the procurement auctions in the Texas school milk market. I define score functions to map the bids from multiple dimensions to one dimension and analyze the factors that may affect the bids of school milk suppliers. After considering the impacts of these factors including backlogs and cost synergies, I can still find some evidences for existence of collusion among the bidders.
Sponsored Search And Sequential Auctions
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Author : Emmanuel Lorenzon
language : en
Publisher:
Release Date : 2016
Sponsored Search And Sequential Auctions written by Emmanuel Lorenzon and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This thesis is a collection of three essays in theoretical auction analysis. Chapter 1 considersbid delegation in the GSP auction mechanism. In a game involving side-contracts and a compensationpolicy set by an agency, the first-best collusive outcome is achieved. We offer a characterization of the implementablebid profiles for the two-position game with three players. Chapter 2 considers the sequentialsale of an object to two buyers: one knows his private information and the other buyer does not. Buyershave a multi-unit demand and private valuations for each unit are perfectly correlated. An asymmetricequilibrium exists when the uninformed player adopts an aggressive bidding strategy. Conversely, hisinformed opponent behaves more conservatively by using bid shading. The bidding behaviour of theuninformed bidder is driven by the opportunity to learn his private valuation for free. This dynamic is atthe root of the decline in the equilibrium price across both sales. In chapter 3, information is observableduring the first-stage auction in a sequential-move game in which the first-mover bidder is observed byhis opponent. A separating equilibrium exists in which the informed bidder bids aggressively when he isthe first-mover which entails a non-participation strategy from his uninformed competitor. Conversely,the latter adopts a conservative behaviour when he is the first-mover. A pooling equilibrium in which theinformed bidder blurs his valuation can only exist if his uninformed opponent adopts a non-participatingstrategy.
Three Essays On Multi Round Procurement Auctions
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Author : Lu Ji
language : en
Publisher:
Release Date : 2006
Three Essays On Multi Round Procurement Auctions written by Lu Ji and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Auctions categories.
My dissertation contributes to auction studies. It analyzes the bidding behavior in multi-round auctions. It is motivated by an interesting multi-round feature observed in the procurement auctions held by the Indiana Department of Transportation (INDOT hereafter), which adopts secret reserve prices. Prior research has indicated that auctions with reserve prices usually lead to no trade. However, prior research has not paid much attention to the possibility that the seller can auction unsold objects from previous rounds and a trade is therefore still likely to occur. My dissertation provides new theoretical and empirical analyses of auctions with multiple rounds. It first develops a game-theoretic bidding model for the multi-round auctions with non-forward looking bidders. It then establishes a structural econometric model in order to conduct a structural analysis of the INDOT data. Lastly it introduces dynamic features into the model by assuming that bidders are forward looking and uses a dynamic control approach to analyze the bidding behavior and policy issues. The main findings are: (1) rational bidders reduce their markup across periods in multi-round auctions; (2) simulations show that using secret reserve price is sometimes better than public reserve price for the procurement auctioneer; (3) counterfactual analyses indicate that on one hand, when bidders are not forward looking, it is better for the INDOT to use a secret reserve price; on the other hand, when bidders are forward looking, it is better for the INDOT to use a secret reserve price when the discount factor is low and to use a public reserve price when the discount factor is sufficiently high.