Efficient local IV estimation of an empirical auction model

In this paper we examine semiparametric efficiency bounds and efficient estimators for the case of a linear local instrument variable (LIV) model under the assumptions studied in Abadie et al. (2002). We apply the semiparametrically efficient estimation method to analyze the relation between bid dispersion and early bidding in an online auction dataset, which is collected from a natural experiment conducted in Nekipelov (2007). The results confirm the theoretical findings developed in Nekipelov (2007). The semiparametric efficient estimation procedure substantially improves the statistical significance of the effect of jump bidding on bid dispersion.     

‘Where ignorant armies clash by night’: the community action movement

Hain, P. , editor, 1975: Community politics Leonard, P. , editor, 1975: The sociology of community action. Wates, N. 1976: The battle for Tolmers Square.     

Common-value auction versus posted-price selling: an agent-based model approach

Previous theoretical work has compared a private-value auction and posted-price market, and an affiliated-value auction and a posted-price market to determine the selling method preferred by sellers. Much less, however, is known about the seller’s preferred selling method when the buyers have a common value of the item. Our objective is to determine if a first-price auction or a posted-price market provides a seller with the larger expected revenue when buyers have a common value of the item being sold. An agent-based posted-price market and an agent-based first-price common-value auction with a reserve price are developed to compare these selling methods. Holding the buyers’ uncertainty about the value of the item constant, the seller prefers the posted-price market when the seller has no uncertainty about the item’s value. When the seller has an equal level of uncertainty as the buyers, the seller’s expected revenue for each market is similar. As the seller’s uncertainty increases beyond the level of the buyers’ uncertainty, the auction with a reserve price eventually becomes the preferred choice.     

Adaptive learning in an asymmetric auction: genetic algorithm approach

Agent-based simulations are performed to study adaptive learning in the context of asymmetric first-price auctions. Non-linearity of the Nash equilibrium strategies is used to investigate the effect of task complexity on adaptive learning by varying the degree of approximation the agents can handle. In addition, learning in different information environments is explored. Social learning allows agents to imitate each other’s bidding strategies based on their relative success. Under individual learning agents are limited to their own experience. We observe convergence to steady states near the predicted equilibrium in all cases. The ability to learn non-linear functions helps the agents with a non-linear equilibrium strategy but hurts the agents with an almost linear one. Better information about the opponent population has a relatively modest impact. A larger number of strategies to experiment with and an ability to systematically compare strategies by holding a number of factors constant have a comparatively stronger beneficial effect.     

On the informed seller problem: optimal information disclosure

We consider a revenue-maximizing seller who, before proposing a mechanism to sell her object(s), observes a vector of signals correlated with buyers’ valuations. Each buyer knows only the signal that the seller observes about him, but not the signals she observes about other buyers. The seller first chooses how to disclose her information and then chooses a revenue-maximizing mechanism. We allow for very general disclosure policies, that can be random, public, private, or any mixture of these possibilities. Through the disclosure of information privately, the seller can create correlation in buyers’ private information, which then consist of valuations plus beliefs. For the standard independent private values model, we show that information revelation is irrelevant: irrespective of the disclosure policy an optimal mechanism for this informed seller generates expected revenue that is equal to her maximal revenue under full information disclosure. For more general allocation environments that allow also for interdependent, for common values, and for multiple items, disclosure policies may matter, and the best the seller can do is to disclose no information at all.     

On the strictly descending multi-unit auction

We analyze the bidding behavior in a strictly descending multi-unit auction where the price decreases continuously without going back to the initial start price once an object is sold. We prove that any equilibrium in the multi-unit descending auction is inefficient. We derive a symmetric equilibrium for general distribution functions as well as an arbitrary number of bidders and objects. Moreover, equilibrium bidding is characterized by a set of initial value problems. Our analysis thus generalizes previous results in the literature.     

The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market

This paper investigates the formation of prices in a perishable goods market where agents bargain repeatedly through pair-wise interactions. After extensive field observations, we chose to focus on two aspects that seem important to actors of this market: the passage of time and update in judgement when gathering information. The main feature of the market is that a seller bargaining with a buyer has incomplete information about buyer's willingness to pay and is not sure how her trading partner will evaluate an offer or compare it with other options. On the other hand, buyers have limited time to look for goods and cannot meet all possible sellers before making a decision. Hence agents cannot calculate the best price to offer but receive information through limited interactions, and use this information to choose their actions.An agent-based model was built to represent a framework that mimics the observed market institution and where agent's possible behaviors and learning was made as consistent as possible with gathered data. Simulations were run, first for sensitivity analysis concerning main parameters, then to test the dependance of agents’ learning to (a) the time buyers can spend on the market and (b) the frequency of update in learning by sellers. To validate the model, features produced by the simulated market are compared to the stylized facts gathered for negotiation about four goods. We reproduce the main features of the data on the dynamics of offers, transaction prices and agents’ behavior during the bargaining phases.     

网络拍卖的法律问题探析

网络拍卖，又称网上拍卖，是指利用互联网进行的拍卖活动，在目前电子商务中网络拍卖占有较大的份额。自１９９９年下半年开始，“网络拍卖”形式的交易活动在国内悄然兴起，网易、搜狐等网络纷纷推出“网络拍卖”形式的活动，众多网站的加入和开通以及网民的积极参与使“网络拍卖”在较短的时间内迅速发展起来，有人将它视为电子商务在国内最有可能成功的一种方式。尽管对网络拍卖是否属于拍卖的范畴有不同的见解和认识，如将网络拍卖称为“网上竞价”、“网上竞标”、“网上采购”、“网上议价”等，但从实际情况看，网络拍卖也是以公开竞…     

Attendance half the story at successful charity auction

The process of procuring the right merchandise is crucial to the success of your charity auction, the author maintains. He gives some pointers on how that task can become an enjoyable experience for all involved.     

Empirical implementation of nonparametric first-price auction models

Nonparametric estimators provide a flexible means of uncovering salient features of auction data. Although these estimators are popular in the literature, many key features necessary for proper implementation have yet to be uncovered. Here we provide several suggestions for nonparametric estimation of first-price auction models. Specifically, we show how to impose monotonicity of the equilibrium bidding strategy; a key property of structural auction models not guaranteed in standard nonparametric estimation. We further develop methods for automatic bandwidth selection. Finally, we discuss how to impose monotonicity in auctions with differing numbers of bidders, reserve prices, and auction-specific characteristics. Finite sample performance is examined using simulated data as well as experimental auction data.     

Fear of losing in a clock auction

We examine bidding behavior in a clock auction in which price is set by the lowest-accepted bid and provisional winners are reported each round (the LABpw auction). This format was used in the India 3G spectrum auction. In the standard theory, the auction performs poorly. In particular it yields lower revenues and is less efficient than the more standard clock auction with exit bids and highest-rejected-bid pricing (the HRB auction). However, the LABpw auction performs well in the lab, achieving higher revenues than the HRB auction. We show how fear of losing provides one motivation for the overbidding that causes higher revenues in the LABpw auction.     

On the convergence of genetic learning in a double auction market

We study the learning behavior of a population of buyers and a population of sellers whose members are repeatedly randomly matched to engage in a sealed bid double auction. The agents are assumed to be boundedly rational and choose their strategies by imitating successful behavior and adding innovations triggered by random errors or communication with other agents. This process is modelled by a two-population genetic algorithm. A general characterization of the equilibria in mixed population distributions is given and it is shown analytically that only one price equilibria are attractive for the GA dynamics. Simulation results confirm these findings and imply that in cases with random initialization with high probability the gain of trade is equally split between buyers and sellers.     

The generalized Stackelberg equilibrium of the all-pay auction with complete information

We characterize the equilibrium of the all-pay auction with general convex cost of effort and sequential effort choices. We consider a set of n players who are arbitrarily partitioned into a group of players who choose their efforts ‘early’ and a group of players who choose ‘late’. Only the player with the lowest cost of effort has a positive payoff in any equilibrium. This payoff depends on his own timing vis-a-vis the timing of others. We also show that the choice of timing can be endogenized, in which case the strongest player typically chooses ‘late’, whereas all other players are indifferent with respect to their choice of timing. In the most prominent equilibrium the player with the lowest cost of effort wins the auction at zero aggregate cost. We thank Dan Kovenock and Luis C. Corchón for discussion and helpful comments. The usual caveat applies. Wolfgang Leininger likes to express his gratitude to Wissenschaftszentrum Berlin (WZB) for its generous hospitality and financial support.     

The value of information in a sealed-bid auction

In this paper, we explore bidders' incentives to gather information in auctions, when there is one bidder with only public information and another with some private information. We find that the bidder with only public information makes no profit at equilibrium, while the bidder with private information generally makes positive profits. Moreover, the informed bidder's profits rise when he gathers extra information, and the increase in greater when the information is collected overtly than when it is collected covertly. When the uniformed bidder can observe some of the better-informed bidder's information, he prefers to make his observations covertly. If the seller has access to some of the better-informed bidder's information, or if he has affiliated information of his own, he can raise the expected price by adopting a policy of making that information public. However, there are cases where a policy of publicizing his information would lower the expected price. The distinguishing feature of these latter cases seems to be that the seller's information is complementary to the information of the better-informed bidder.     

The quality assurance role of seller financing: evidence from second mortgages

Quality problems that are known to the seller of a product, but will become known to the buyer only after the purchase have the potential to frustrate voluntary exchanges. Where the determination of quality after the sale is cut-and-dried, brand names and unconditional guarantees will bond contract performance. When the problem is more subtle or confounded by the extent of consumer inputs, requiring risk-sharing by the contracting parties, these bonding devices typically are not sufficient. Under the circumstances, seller financing may be an efficient contracting solution for bonding the quality dimension of the contract. This form of financing makes both the buyer and the seller share the risk that the product may not suit the buyer’s needs in the way promised by the seller. This paper provides further empirical evidence on the quality assurance role of seller financing. We consider seller-financed second mortgages in the National Association of Realtors database. Seller financing in second mortgages may be a supplement to first mortgages supplied by conventional lenders. The role of seller financing as a quality assurance mechanism in second mortgages is more complex than its role in first mortgages, but is also less subject to an alternative interpretation of credit rationing than is its role in seller-financed first mortgages. To avoid further complexities, we do not consider second seller financing transactions that supplement first assumption mortgage transactions.     

A consistent nonparametric test of affiliation in auction models

We propose a new nonparametric test of affiliation, a strong form of positive dependence with independence as a special, knife-edge, case. The test is consistent against all departures from the null of affiliation, and its null distribution is standard normal. Like most nonparametric tests, a sample-size dependent input parameter is needed. We provide an informal procedure for choosing the input parameter and evaluate the test’s performance using a simulation study. Our test can be used to test the fundamental assumptions of the auctions literature. We implement our test empirically using the Outer Continental Shelf (OCS) auction data.     

The effect of bid withdrawal in a multi-object auction

The Federal Communications Commission currently utilizes a simultaneous multi-round ascending bid auction to allocate Personal Communication Services licenses. In the auction, participants are allowed to withdraw standing bids at a penalty. The penalty is equal to the maximum of zero or the difference between the value of the withdrawn bid on a license and the highest bid after the withdrawal on that license. The withdrawal rule is designed to assist bidders wishing to assemble combinations of licenses who find themselves stranded with an assortment of licenses for which their bids sum to more than their value. This paper reports results of experiments that examine the effect of the withdrawal rule in environments in which losses can occur if packages of licenses must be assembled piecemeal. The experiments demonstrate that there is a tradeoff with using the rule: efficiency and revenue increase, but individual losses are larger. Furthermore, the increased efficiency does not outweigh the higher prices paid so that bidder surplus falls in the presence of the withdrawal rule. Received: 10 October 1997 / Accepted: 10 September 1998