Coveted or Overlooked? The Psychology of Bidding for Comparable Listings in Digital Auctions

This article elaborates on, and provides evidence of the herd behavior bias -- the tendency to gravitate toward, and bid for, auction listings with one or more existing bids, ignoring comparable or even more attractive unbid-for listings available at the same time -- exhibited by buyers in digital auctions. Some listings attract many bidders and become coveted, the center of bidding attention, while other equivalent or even superior listings are overlooked, receiving no bids at all. Empirical analysis using data from digital auctions across different product categories shows that this herd behavior bias is attenuated with increasing bid price, but increases with the difficulty of evaluating quality. The practical implications of these findings, and promising research opportunities in this area are also discussed.     

Can retailers get higher prices for “end-of-life” inventory through online auctions?

Manufacturers and retailers are using online auctions to liquidate excess inventory. Using a field study of 11,879 online auctions, this paper builds upon theories of competitive processes to relate four key seller-controlled variables (starting price, day of close, auction length, and brand) to outcomes of online auction for apparel goods. Results suggest that to obtain a higher percentage of the original retail price, retailers should start with a lower price and feature national brands. These and other findings are discussed and a number of future research topics are offered.     

The Effect of Social Cues on Sniping Behavior in Internet Auctions: Field Evidence and a Lab Experiment

This research explores how social cues presented in an online auction affect sniping behavior. Sniping is a strategy of placing a bid on an item in the very ending stages of an auction with a pre-determined ending time in an attempt to win the auction. Such a strategy conceals the intentions of the bidder until the last moments of the auction and minimizes the possibility of other opposing bidders submitting higher bids due to the short period of time left to respond. The research includes two field studies and a lab experiment indicating that sniping appears to be influenced by social factors, that is, when there are a greater number of bidders in the auction or the auction site provides social information about the bidders, the relative use of sniping increases. This research supports the perspective that bidders rely on others' bidding behavior and characteristics as an indication of the true value of the item on sale, and is one of the first studies in the literature which takes this perspective.     

Simultaneous one-sided prediction intervals for a two-parameter exponential distribution using complete or type II censored data

Summary Simultaneous prediction intervals for observations inl future samples from a two-parameter exponential distribution are considered. The prediction limits depend upon a previously available complete or type II censored sample from the same distribution. An equation is derived from which the prediction factor is determined and exact prediction limits are illustrated with a numerical example.     

经济增长、投资与城乡收入差距互动关系的实证分析

本文在分析我国城乡收入差距对投资和经济增长影响的基础上,建立了一个能考察经济增长、城乡收入差距与投资互动关系的联立方程组模型,用2SLS和3SLS方法估计结果表明,劳动者受教育程度和人均收入水平的提高既能促进经济增长,又能缩小城乡收入差距。因此,降低固定资产投资在GDP中所占比重、转变产业结构是实现我国经济增长效率和公平双目标的有效途径。     

Comparative Advantage in Demand: Experimental Evidence of Preferences for Genetically Modified Food in the United States and European Union

The United States (US) exports more than US$6 billion in agricultural commodities to the European Union(EU) each year, but one issue carries the potential to diminish this trade: use of biotechnology in food production. The EU has adopted more stringent policies towards biotechnology than the US. Understanding differences in European and American policies towards genetically modified (GM) foods requires a greater understanding of consumers’ attitudes and preferences. This paper reports results from the first large‐scale, cross‐Atlantic study to analyse consumer demand for genetically modified food in a non‐hypothetical market environment. We strongly reject the frequent if convenient assumption in trade theory that consumer preferences are identical across countries: the median level of compensation demanded by English and French consumers to consume a GM food is found to be more than twice that in any of the US locations. Results have important implications for trade theory, which typically focuses on differences in specialization, comparative advantage and factor endowments across countries, and for on‐going trade disputes at the World Trade Organization.     

Regulatory reform of the UK gas market: The sase of the storage auction

The UK gas industry has undergone major changes since it was privatised in 1986 as a fully integrated monopoly. The most significant of these has occurred not as a result of the privatisation legislation but by the intervention of the ordinary competition authorities in support of an active industry regulator. While price capping continues to be used as the primary instrument for welfare protection against the still substantial monopolistic powers of the incumbent, new competition (which has been positively encouraged) has had the greater impact on prices and choice. Recently, however, the regulator has encouraged the use of auctions for the sale of storage capacity. This paper considers the merits of auctions and makes a tentative evaluation of their effectiveness. Further use of auctions is recommended but reserve prices are considered inappropriate where monopoly power still remains.     

An experimental examination of target based conservation auctions

Conservation auctions are increasingly employed to increase the provision of Ecological Goods and Services (EG&S) for achieving environmental goals. Most applications of conservation auctions concern the efficient allocation of a fixed conservation budget. However an important and under-explored application of conservation auctions is in meeting environmental targets, either as part of regulatory compliance by industry or by governments in meeting specified policy objectives. This paper examines the ability of a conservation auction to meet an environmental target. We use experimental economics methods benchmarked to a wetlands restoration case study to examine bidder behavior and efficiency in both budget constrained and target constrained auctions when landowners with increasing marginal costs can offer increasing sized bundles of wetland acres. The target constrained auction is characterized by an all or nothing rule, where there is no payout if the target is not met. We find that rent seeking and average cost in the target constrained auction is less than in a budget constrained auction, but that efficiency eroded in repeated rounds suggesting learning effects as participants realize there is no budget cap. Even with learning effects the target based auction out-performs the budget based auction. Adding a reserve price to the target based auction significantly reduced rent seeking but also increased the probability that the target was not met. The results have important implications for auction design in real world settings.     

Institutional constraints on conservation auction: Organizational mandate,competencies and practices

Auctions appeal to analysts and policy designers because of their potential efficiency in recruiting new areas for nature conservation. The failure to develop genuine auctions and competitive tender processes is typically blamed on the design and the attractiveness of the instrument. However, the institutional constraints that a new competitive mechanism faces when placed in a real-world ecological-institutional setting are only partly anticipated by the theoretical and analytical approaches. This paper explores the theory-based principles of cost-effectiveness against a real-world auction instrument designed for forest biodiversity conservation in Finland. The instrument, called “Natural Values Trading”, specified that the tenders should be invited and compared on an annual basis but the competitive procedure was not operationalized. Instead, sites were evaluated on a first come – first serve basis, applying ecological criteria and pricing based on opportunity costs. The institutional constraints of the auction mechanism centred on the difficulty that public authorities geared toward implementing law and treating citizens equally faced with a competitive arrangement. The pressure to generate instant impact overrode experimenting with new mechanisms and exiting an administrative comfort zone. The findings conform to the institutional theories that identify challenges with matching organizational mandate, reallocating and developing organizational competencies as well as changing informal organizational and professional practices. The design of biodiversity conservation mechanisms will not go far by focusing solely on cost-effectiveness; instead, the institutional friction should be taken seriously and organizational mandates, competencies and practices should be addressed explicitly.     

Effectiveness of harvest strategies in achieving multiple management objectives in a multispecies fishery

Fisheries management is characterised by multiple objectives, some of which may be complementary, while others may require trade‐offs between outcomes. Balancing these objectives is made more complex in the case of multispecies and multigear fisheries. In this paper, we develop a bioeconomic model that captures the key elements of such a fishery to test a range of potential harvest strategies to provide insights into how economic target reference points could lead to both desirable and undesirable management outcomes (e.g. discards). The model is developed as a long‐run optimisation model to identify target reference points to achieve multispecies maximum economic yield, and a dynamic recursive optimisation model, which includes more realistic representation of fishers’ behaviour, such as discards and trading of under‐caught species quotas. The potential economic, social and ecological impacts are evaluated using data envelopment analysis (DEA). The results suggest that the use of proxy target reference points can result in short‐term economic benefits at the cost of slower stock recovery and higher discarding. Limiting the number of species subject to quota controls may also prove beneficial in multispecies fisheries, while ensuring quota markets are efficient is likely to produce benefits irrespective of the harvest strategy adopted.