Common Values and Low Reserve Prices

I show that the benefit of a high reserve price in a common‐values ascending auction is lower than in the observationally equivalent private values setting. Put another way, when bidders have common values, empirical estimation based on a private‐values model will overstate the value of a high reserve price. Via numerical examples, I show this same ranking typically applies to the level of the optimal reserve price as well, and often to the benefit of any reserve price, not just high ones. With common values, the optimal reserve can even be below the seller's valuation, which is impossible with private values.     

Optimal choice of a reserve price under uncertainty

The revenue function for a standard auction is typically asymmetric around the revenue maximizing reserve price. Thus, choosing a reserve price that is smaller than the revenue maximizing reserve price can result in a substantially different loss than choosing one that is larger by the same amount. Therefore, when the revenue function is unknown, it is important to consider uncertainty around the revenue function and its asymmetric structure. For this purpose, I propose a Bayesian decision rule and illustrate its typical revenue gains. I then apply the rule to the bid data from the U.S. timber sales.     

Reserve Prices in Repeated Auctions

This paper aims to estimate the effect of imposing a reserve price in repeated auctions of homogeneous items. I model the behavior of impatient bidders who search for the best auction outcome over time. The model is used to develop estimating equations for the bidders’ valuations, and to evaluate the effect of reserve prices on bids and revenue. Using data collected from surplus auctions of personal computer processors, I find economically significant gains from imposing a reserve price. The revenue-maximizing reserve price improves revenue by about 23% for a large subsample of the auctions in the data.     

Optimal reserve prices in sealed-bid auctions with reference effects

The reference effect and loss aversion are incorporated into the buyer’s utility in the symmetric independent private value models of sealed-bid auctions. The buyer’s equilibrium bidding strategy and the seller’s optimal reserve price are derived for the first-price and second-price sealed-bid auctions. In both auction mechanisms, the seller’s optimal reserve price and expected revenue are increasing in the reference point. We compare the seller’s expected revenues as well as the optimal reserve prices in the two auctions. The results show that the seller will set a higher optimal reserve price but obtain lower optimal expected revenue in the second-price auction compared to the first-price auction. Further, we extend the model to the gain-seeking case, and endogenize the reference point as the ex-ante expected price of the item in equilibrium. In contrast to the loss-averse case, the seller will set a lower optimal reserve price but obtain higher optimal expected revenue in the second-price auction compared to the first-price auction if the buyers are gain-seeking. With an endogenous reference point, similar results are obtained in terms of revenue comparison between the two auctions.     

Affiliation bias in the online market for rental accommodation

We find evidence of taste‐based discrimination against rival affiliations in the online market for rental accommodation. Airbnb hosts in college towns increase their listing prices more than hotels on home football games against rival teams. By setting listing prices too high as a result of their affiliation bias against rival fans, hosts experience a 30% reduction in rental income. The overestimation of demand, the cost (inconvenience) of temporary relocation, and the likelihood of incurring damage cannot explain the inverse relation between listing price increases, and rental incomes that is limited to games against rival teams. Instead, greater financial constraints are associated with smaller listing price increases, and higher rental incomes on rival games, suggesting that taste‐based discrimination is a luxury.     

Abschätzung des Erlöspotentials aus der Leistungsvorhaltung am Schweizer Tertiärregelmarkt

The analysis attempts to estimate the revenue potential from the provision of tertiary reserve capacity in the Swiss electricity control area based on publicly available data on historic tenders (June 2010–December 2013). A series of bidding strategies is defined for this purpose and backtested over the available time frame. We compare deterministic strategies derived from the observed price distribution of the previous day or week on the one hand with a model-based strategy on the other hand. The latter is implemented as a random forest regression model that takes into account, amongst other factors, the fill level of reservoir lakes in Switzerland. The results suggest that the model-based strategy be favoured over the deterministic strategies as it captures a higher amount of potential revenues and, most importantly, as it is more efficient. With the simplifying assumption that only a relatively small reserve capacity is offered and thus the results of the historic tenders are not affected, we get an average revenue potential of between 6 and 8 CHF/MW/h for negative tertiary reserve capacity and between 3 and 4 CHF/MW/h for positive tertiary reserve capacity.     

Optimal mechanisms for an auction mediator

We consider a dynamic auction environment with a long-lived seller and short-lived buyers mediated by a third party. A mediator has incomplete information about traders’ values and selects an auction mechanism to maximize her expected revenue. We characterize mediator-optimal mechanisms and show that an optimal mechanism has a simple implementation as a Vickrey auction with a reserve price where the seller pays to the mediator only a fixed percentage from the closing price.     

Auctioneers sometimes prefer entry fees to extra bidders

We investigate a market thickness–market power tradeoff in an auction setting with endogenous entry. We find that charging admission fees can sometimes dominate the benefit of recruiting additional bidders, even though the fees themselves implicitly reduce competition at the auction stage. We also highlight that admission fees and reserve prices are different instruments in a setting with uncertainty over entry costs, and that optimal mechanisms in such settings may be more complex than simply setting a reserve price. Our results provide a counterpoint to the broad intuition of Bulow and Klemperer (1996) that market thickness often takes precedence over market power in auction design.     

SCREENING AND MERGER ACTIVITY*

In our paper, the target of a proposed merger, by setting a reserve price, is able to screen prospective acquirers according to their (expected) ability to generate merger‐specific synergies. Both empirical evidence and many merger models suggest that the difference between high and low‐synergy mergers becomes smaller during booms. Thus, a target's opportunity cost for sorting out relatively less fitting acquirers increases and, hence, targets screen less tightly during booms, which leads to a hike in merger activity. Our screening mechanism not only predicts that merger activity is intense during booms and subdued during recessions but is also consistent with other stylized facts about takeovers and generates novel testable predictions.     

Auctions with quantity externalities and endogenous supply

This paper studies the design of license auctions when the number of licenses allocated in the auction determines structure of the post-auction market. I first show that a sequence of conditional reserve prices that specify minimum acceptable bid at each supply level can be used to determine supply endogenously. Then I construct a static auction called multi-dimensional uniform-price auction and a dynamic auction called Walrasian clock auction that allow the auctioneer to condition reserve price on supply and allow bidders to condition bids on supply. I show that both proposed auctions can implement the efficient market structure that maximizes total surplus in the post-auction market in a dominant strategy equilibrium. I next characterize the optimal auction and show that the two proposed auctions can yield the optimal revenue under a sequence of optimal reserve prices.     

Information disclosure in optimal auctions

This paper analyzes a situation in which the seller controls the accuracy of what potential buyers learn about their valuation of a good to be sold. This setting is related to many real situations such as home sales, antique auctions, and digital platforms such as Google and Facebook selling online advertising slots. Two important questions arise: what is the optimal selling mechanism, and what is the optimal disclosure policy of the seller. Under the assumption of private values, a simple auction with a reserve price is the optimal mechanism. What we show is that the amount of (costly) information provided increases with the number of potential bidders when using the optimal mechanism and is greater than when the object is always sold. Because information changes the distribution of a bidder’s expected valuations, the optimal reserve price also changes, so that the number of bidders (indirectly) affects the reserve price. We show that as the number of bidders increases, the optimal reserve price becomes more restrictive.     

First‐Price Sealed‐Bid Tender versus English Open Auction: Evidence from Land Auctions

This article compares whether the first‐price sealed‐bid tender or the ascending English open auction generates higher revenue for the seller. Using a unique set of data for land sales and accounting for the presence of an endogenous discrete mechanism choice variable, our results show that the first‐price sealed‐bid tender generates a lower land price, in the range of 1.2–9.6%, than the English open auction. Our results validate the theoretical prediction that open auctions result in higher prices because bidders can infer other bidders’ information by observing their bids in the common value auction paradigm.     

外汇储备增长对价格水平影响研究——一个文献综述

自20世纪90年代以来,我国外汇储备逐渐增长．近些年来,增长迅速。与之伴随的是货币供应量的增多与价格水平的上涨,通货膨胀压力增大。理论界对外汇储备增长与价格水平的关系进行了深入的研究。文章从外汇储备增长对价格水平影响的模型、外汇储备增长对价格水平没有影响和外汇储备增长对价格水平有影响三方面对相关代表性文献进行系统的梳理,为进一步的研究提供参考。     

Collusion through Coordination of Announcements

A theory is developed to explain how sellers can effectively collude by coordinating on list prices (or surcharges), while leaving sellers to set their final prices. List prices are interpreted to be cheap talk announcements about cost information unknown to buyers. Buyers use those announcements to decide whom to invite to their procurement auction and the reserve price to set. By coordinating on a high list price to signal high cost, sellers produce supracompetitive prices by inducing buyers to be less aggressive, as reflected in a higher reserve price. We show that collusion can raise social welfare.     

THE EFFECT OF AUCTION FORMAT ON EFFICIENCY AND REVENUE IN DIVISIBLE GOODS AUCTIONS: A TEST USING KOREAN TREASURY AUCTIONS*

This paper measures the efficiency and revenue properties of the two most popular formats for divisible goods auctions: the uniform‐price and discriminatory auction. We analyze bids into the Korean Treasury auctions which have used both formats. We find that the discriminatory auction yields statistically higher revenue. Unlike previous work that uses data from only one format, we are able to compare the efficiency properties of the two formats. We find that the discriminatory auction better allocates treasury bills to the highest value financial institutions. However, the differences in revenue and efficiency are not large because the auctions are very competitive.     

First Degree Price Discrimination Goes to School

Personalized pricing is widely discussed but seldom observed, making studies of its efficacy rare. Yet, first degree price discrimination is common in the pricing of higher education, and I use data on prices and the characteristics of students admitted to a professional graduate program at a public university to estimate a matriculation demand function. I then derive linear pricing functions that maximize revenue for a target number of students. By allowing these functions to depend on progressively richer sets of observables, I explore the effect of personalization of pricing on profit. Tailoring prices to a one‐dimensional measure of student quality would raise revenue by 2.2 per cent above the revenue with uniform pricing. Pricing based on both student quality and state residency raises revenue by 8.4 per cent, and further tailoring based on available observables raises prices 9.0 per cent above the maximum revenue under uniform pricing. Pricing that obeys current statutory tuition limits raises revenue less but still by just over half as much. I also infer the welfare weights that the pricing process implicitly attaches to student characteristics.     

关于石油企业风险预警与防风险措施初探

石油勘探开发是高风险、高投入行业，石油企业时刻面临诸如勘探风险、油价波动风险、市场风险、国际政治经济风险等多重风险因素的影响。深入探讨和研究石油企业的经营风险和预警管理很有必要。石油企业的防范和规避风险预警措施，应包括：建立一套规范、全面的预警管理程序和预警系统，通过多渠道建立国家战略石油储备，建立健全石油企业内外部预警监督机制等。通过建立企业预警指标体系和预警机制，采取有效的预警措施，促使石油企业健康、持续、稳定发展。     

Anti‐Competitive Interconnection: the effects of the elasticity of consumers' expectations and the shape of the network effects function

I find that interconnection might cause the market to be less competitive, and might lead to an increase in the price firms charge for their product. Absent interconnection, firms compete for a consumer for two reasons. The first reason is to obtain revenue from selling the product to a consumer (as in the case without network effects). The second reason is that by expanding the network by one more consumer, the product becomes more attractive to all other consumers. Interconnection eliminates the second reason—when firms interconnect, they are no longer concerned with consumers' following the crowd. I show that consumers and society might be worse off from interconnection. I focus on two factors that make the (post‐interconnection) price increase larger: consumer expectations that are highly sensitive to prices and consumers putting a high value on small increases in network size at the equilibrium market shares. Both of these factors make firms highly competitive, but only if the firms' products' networks are not interconnected.     

中国的房价问题：现状、问题、成因及解决方向——现代社会是如何偏离“住者有其屋”这一理想的

当前国内房价的居高不下源于需求和供给两方面的因素：需求方面主要在于投机性需求和投资性需求，其中。投机性需求源于当前房地产市场化过程中的配套制度不健全，而投资性需求则根本上与收入差距的拉大密切相关；而供给方面则主要源于高地价和高利润的冲击，其中，高地价源于不合理的财政税收制度，高利润则根本上与不合理的土地资源占有关系有关。显然，要解决住房问题，也就要从上述四个方面着手。但不幸的是，现代主流经济学却基于伦理自然主义将这种现状合理化了，从而使得“住者有其屋”这一理想离现代社会越来越远。     

Rent Sharing and the Compensation of Head Coaches in Power Five College Football

The monopoly and monopsony power of intercollegiate sports create significant rents, but previous studies of intercollegiate football coaches’ salaries implicitly assume that coaches are paid their marginal revenue products. In a two-stage estimation, we show that coaches share in these rents. The first stage shows that several common measures of coaches’ productivity do not affect an athletic department’s variable revenue. When we include these measures in the second-stage salary equation, their impact on pay reflects bargaining power, not productivity. We also find that several measures of fixed revenue, which are independent of the coach’s performance, increase the coach’s pay.