Pay As Bid Vs First Price Auctions
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Pay As Bid Vs First Price Auctions
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Author : Milena Wittwer
language : en
Publisher:
Release Date : 2018
Pay As Bid Vs First Price Auctions written by Milena Wittwer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Pay-as-bid auctions extend the rules of the well-known first-price auction to the sale of multiple units of the same good. According to a common understanding of the recent literature, strategic incentives in pay-as-bid auctions differ from those in the first-price auctions when bidders have multi-unit demand. I show that each of N symmetrically informed bidders shades his bid for 1 of N shares of a perfectly divisible good in a pay-as-bid auction as if he competed with (N-1)N bidders for one indivisible good in a first-price auction. This analogy carries over to environments where bidders have pri- vate information if equilibrium demand schedules are additively separable in the type but breaks otherwise. Whether bidding in pay-as-bid auctions is more complex than in first-price auctions thus depends on the type of uncertainty bidders face.
Pay As Bid Auctions In Theory And Practice
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Author : Milena Wittwer
language : en
Publisher:
Release Date : 2018
Pay As Bid Auctions In Theory And Practice written by Milena Wittwer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Auctions categories.
The pay-as-bid auction, also called the discriminatory price auction, is among the most common auction formats to price and allocate assets and commodities. Trillions of dollars each year are traded in pay-as-bid auctions. The format is the natural multiunit extension of the first-price auction of a single item. Bidders specify a price for each unit they want to buy. The market clears at the price where supply intersects aggregate demand and winning bidders pay their bids for each unit won. In the first chapter of my thesis, I explain strategic differences and similarities between the single-item and multi-unit case. In practice, it is rare that multi-unit auctions take place in isolation. The second chapter introduces a model of interconnected pay-as-bid auctions. The auctions run in parallel and offer perfectly divisible substitute goods to the same set of symmetrically informed bidders with multi-unit demand. This connects the demand side of both auctions. The supply side is linked because the total amounts for sale may be correlated. I show that there exists a unique symmetric Bayesian Nash equilibrium when the marginal distributions of supply have weakly decreasing hazard rates. I then develop practical policy recommendations on how to exploit the interconnection across auctions to increase revenues. These theoretic insights are the basis for the final chapter of my thesis. In collaboration with Jason Allen (Bank of Canada) and Jakub Kastl (Princeton University) I use data from auctions of Canadian debt to quantify the extent to which demands for securities with different maturities are interdependent. Generalizing methods for estimating demand schedules from bidding data to allow for interdependencies, our results suggest that 3, 6 and 12-month bills are often complementary in the primary market for Treasury bills. We present a model that captures the interplay between the primary and secondary markets to provide a rationale for our findings.
In Defense Of Pay As Bid Auctions
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Author : Kyle Leland Woodward
language : en
Publisher:
Release Date : 2015
In Defense Of Pay As Bid Auctions written by Kyle Leland Woodward and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Pay-as-bid auctions are commonly used to sell treasury securities, purchase government debt, distribute electrical generation, and allocate emissions credits. In spite of the practical relevance of the format, the pay-as-bid auction is a fundamentally misunderstood object. As compared to other popular auction formats used in the sale of homogeneous goods, the pay-as-bid auction is often incorrectly assumed to have comparatively bad incentive properties and to induce suboptimal outcomes. In this dissertation I model the pay-as-bid auction as a set of strategic bidders competing for units of a perfectly-divisible commodity. This model allows surprisingly tractable representations of bidder behavior, which provide novel evidence uniformly in favor of the pay-as-bid auction format. Chapters 2 and 3 consider the theoretical implications of this model for existing empirical work. I demonstrate that when bidders have private information, equilibrium behavior is well-defined and there is an equilibrium in pure strategies. I additionally show that, through a process I call strategic ironing, bidders face strong incentives to submit bids substantially below their true values. The nature of these incentives implies that previous intuition---the pay-as-bid auction is strategically similar to a single-unit first-price auction---is ill-founded. Although strategic ironing is shown to dramatically reduce equilibrium bids below an intuitive benchmark, the current misunderstanding of the properties of the auction format may perversely imply that the pay-as-bid format generates comparatively higher revenues than has been inferred. Chapters 4 and 5 engage in a direct comparative investigation of the pay-as-bid format when bidders have no private information. I obtain results on the existence and uniqueness of equilibria in this setting, and show that optimally-parameterized auction formats are revenue equivalent. When the auctions are nonoptimally parameterized, I demonstrate that the pay-as-bid auction revenue-dominates alternate formats. I show computationally that this dominance continues to hold within a broader class of randomized mechanisms. The computational results suggest large-market revenue equivalence within this class. The findings in this dissertation emphatically support the implementation of the pay-as-bid mechanism. It is well-behaved, potentially tractable, and smoothly revenue-dominant when compared to alternate auction formats.
Auction Theory
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Author : Vijay Krishna
language : en
Publisher: Academic Press
Release Date : 2009-09-28
Auction Theory written by Vijay Krishna and has been published by Academic Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-09-28 with Business & Economics categories.
Auction Theory, Second Edition improves upon his 2002 bestseller with a new chapter on package and position auctions as well as end-of-chapter questions and chapter notes. Complete proofs and new material about collusion complement Krishna’s ability to reveal the basic facts of each theory in a style that is clear, concise, and easy to follow. With the addition of a solutions manual and other teaching aids, the 2e continues to serve as the doorway to relevant theory for most students doing empirical work on auctions. Focuses on key auction types and serves as the doorway to relevant theory for those doing empirical work on auctions New chapter on combinatorial auctions and new analyses of theory-informed applications New chapter-ending exercises and problems of varying difficulties support and reinforce key points
Auction Theory
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Author : Pak-Sing Choi
language : en
Publisher: Springer Nature
Release Date : 2021-05-24
Auction Theory written by Pak-Sing Choi and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-05-24 with Business & Economics categories.
This textbook provides a short introduction to auction theory through exercises with detailed answer keys. Focusing on practical examples, this textbook offers over 80 exercises that predict bidders’ equilibrium behaviour in different auction formats, along with the seller’s strategic incentives to organize one auction format over the other. The book emphasizes game-theoretic tools, so students can apply similar tools to other auction formats. Also included are several exercises based on published articles, with the model reduced to its main elements and the question divided into several easy-to-answer parts. Little mathematical background in algebra and calculus is assumed, and most algebraic steps and simplifications are provided, making the text ideal for upper undergraduate and graduate students. The book begins with a discussion of second-price auctions, which can be studied without using calculus, and works through progressively more complicated auction scenarios: first-price auctions, all-pay auctions, third-price auctions, the Revenue Equivalence principle, common-value auctions, multi-unit auctions, and procurement auctions. Exercises in each chapter are ranked according to their difficulty, with a letter (A-C) next to the exercise title, which allows students to pace their studies accordingly. The authors also offer a list of suggested exercises for each chapter, for instructors teaching at varying levels: undergraduate, Masters, Ph.D. Providing a practical, customizable approach to auction theory, this textbook is appropriate for students of economics, finance, and business administration. This book may also be used for related classes such as game theory, market design, economics of information, contract theory, or topics in microeconomics.
Understanding Auctions
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Author : Asunción Mochón
language : en
Publisher: Springer
Release Date : 2014-09-15
Understanding Auctions written by Asunción Mochón and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-09-15 with Business & Economics categories.
In recent years, auctions have become an important field and many markets have designed new and sophisticated auction models to assign different types of items. The prime goal of this book is to set an organized classification of the main auction mechanisms in a way that readers can understand the importance of auction design and the advantages and drawbacks of each model. Given the relevance of the subject, there is a great volume of research about this topic. Nevertheless, most of these contributions use complex mathematical language difficult to understand for the average reader. In this book, the authors summarize the main ideas of the auction theory and explain them with simple language and plenty of examples. This book is a good starting point for any researcher interested in embracing the auction design as it also includes numerous real-world examples to engage the reader in the topic. “This book fills an important gap by making the main ideas and findings of auction research accessible.” Professor Paul Milgrom, Department of Economics, Stanford University.
An Introduction To Auction Theory
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Author : Flavio M. Menezes
language : en
Publisher: Oxford University Press, USA
Release Date : 2005
An Introduction To Auction Theory written by Flavio M. Menezes and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Business & Economics categories.
Auction theory is now an important component of an economist's training. The techniques and insights gained from the study of auction theory provide a useful starting point for those who want to venture into the economics of information, mechanism design, and regulatory economics.This book provides a step-by-step, self-contained treatment of the theory of auctions. It allows students and readers with a calculus background to work through all the basic results, covering the basic independent-private-model; the effects of introducing correlation in valuations on equilibrium behaviour and the seller's expected revenue; mechanism design; and the theory of multi-object auctions.
Networks Crowds And Markets
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Author : David Easley
language : en
Publisher: Cambridge University Press
Release Date : 2010-07-19
Networks Crowds And Markets written by David Easley 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 2010-07-19 with Computers categories.
Are all film stars linked to Kevin Bacon? Why do the stock markets rise and fall sharply on the strength of a vague rumour? How does gossip spread so quickly? Are we all related through six degrees of separation? There is a growing awareness of the complex networks that pervade modern society. We see them in the rapid growth of the internet, the ease of global communication, the swift spread of news and information, and in the way epidemics and financial crises develop with startling speed and intensity. This introductory book on the new science of networks takes an interdisciplinary approach, using economics, sociology, computing, information science and applied mathematics to address fundamental questions about the links that connect us, and the ways that our decisions can have consequences for others.
Auction Theory
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Author : Source Wikipedia
language : en
Publisher: University-Press.org
Release Date : 2013-09
Auction Theory written by Source Wikipedia and has been published by University-Press.org this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-09 with categories.
Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. Pages: 28. Chapters: All-pay auction, Bid-to-cover ratio, Bidding function, Chinese auction, Combinatorial auction, Counterspeculation, Auctions, and Competitive Sealed Tenders, Double auction, Dutch auction, English auction, First-price sealed-bid auction, Generalized second-price auction, Japanese auction, Online auction, Revenue equivalence, Reverse auction, Uniform price auction, Unique bid auction, Vickrey auction, Walrasian auction, Winner's curse. Excerpt: An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange. Auction Room, Christie's, circa 1808 Artemis, Ancient Greek marble sculpture. In 2007, a Roman-era bronze sculpture of "Artemis and the Stag" was sold at Sotheby's in New York for US$28.6 million, by far exceeding its estimates and at the time setting the new record as the most expensive sculpture as well as work from antiquity ever sold at auction. An 18th century Chinese meiping porcelain vase. Porcelain has long been a staple at art sales. In 2005, a 14th century Chinese porcelain piece was sold by the Christie's for 16 million, or US$28 million. It set a world auction record for any ceramic work of art.The word "auction" is derived from the Latin auge which means "I increase" or "I augment." For most of history, auctions have been a relatively uncommon way to negotiate the exchange of goods and commodities. In practice, both haggling and sale by set-price have been significantly more common. Indeed, before the seventeenth century the few auctions that were held were sporadic and infrequent. Nonetheless, auctions have a long history, having been recorded as early as 500 B.C. According to Herodotus, in Babylon auctions of...
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.