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Bidding Behavior Evolution In Sequential Auctions
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Book Synopsis Bidding Behavior Evolution in Sequential Auctions by : Paulo Goes
Download or read book Bidding Behavior Evolution in Sequential Auctions written by Paulo Goes and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Retailers are increasingly exploiting sequential online auctions as an effective and low cost distribution channel for disposing large quantities of inventory. In such auction environments, bidders have the opportunity of participating in many auctions to learn and choose the bidding strategy that best fits their preferences. Previous studies have mostly focused on identifying bidding strategies in single, isolated online auctions. Using a large data set collected from sequential online auctions, we first characterize bidding strategies in this interesting online environment and then develop an empirical model to explain bidders' adoption of different strategies. We also examine how bidders change their strategies over time. Our findings challenge the general belief that bidders employ their strategies regardless of experience or their specific demand. We find that bidders' demand, participation experience, and auction design parameters affect their choice of bidding strategies. Bidders with unit demand are likely to choose early bidding strategies, while those with multiple unit demand adopt late bidding strategies. Auction design parameters that affect bidders' perception of demand and supply trends affect bidders' choice of bidding strategies. As bidders gain experience within a sequence of auctions, they start choosing late bidding strategies. Our findings help auctioneers to design auction sequences that maximize their objectives. Full paper available at https://doi.org/10.2307/41703496.
Book Synopsis Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions by : Paulo Goes
Download or read book Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions written by Paulo Goes and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A growing number of vendors are using a sequence of online auctions to sell large inventories of identical items. Although bidding strategies and bidder behavior in single auctions have been extensively studied, limited research exists on bidding in sequential auctions. We seek to explain how bidders in such an environment learn from the information, and form and update their willingness to pay (WTP). Using a large data set from an online auction retailer, we analyze the evolution of the bidders' WTP as well as the effect of auction design on bidders' WTP in sequential auctions. We see our study in the context of a longitudinal field experiment, in which we were able to track actions of repeat bidders over an extended period of time. Our results show that bidders' WTP in sequential auctions can be explained from their demand characteristics, their participation experience in previous auctions, outcomes in previous auctions, and auction design parameters. We also observe, characterize, and measure what we call a modified demand reduction effect exhibited across different auctions, over time, by multiunit demand bidders. Our findings are important to enable better auction mechanism design, and more sophisticated bidding tools that explore the rich information environment of sequential auctions. Full paper available at https://doi.org/10.1287/isre.1080.0216.
Book Synopsis An Experimental Study on Sequential Auctions with Privately Known Capacities by : Luca Corazzini
Download or read book An Experimental Study on Sequential Auctions with Privately Known Capacities written by Luca Corazzini and published by . This book was released on 2017 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We experimentally study bidding behavior in sequential first-price procurement auctions where bidders' capacity constraints are private information. Treatment differs in the ex-ante probability distribution of sellers' capacities and in the (exogenous) probability that the second auction is actually implemented. Our results show that: (i) bidding behavior in the second auction conforms with sequential rationality; (ii) while first auction's bids negatively depend on capacity, bidders seem unable to recognize this link when, at the end of the first auction, they state their beliefs on the opponent's capacity. To rationalize this inconsistency between bids and beliefs, we conjecture that bidding in the first auction is also affected by a hidden, behavioral type - related to the strategic sophistication of bidders - that obfuscates the link between capacity and bids. Building on this intuition, we show that a simple level-k model may help explain the inconsistency.
Book Synopsis Bidding in Sequential Auctions by : George Deltas
Download or read book Bidding in Sequential Auctions written by George Deltas and published by . This book was released on 2000 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Sequential Effects and Bidder Heterogeneity in B2B Auctions by : Alex Scott
Download or read book Sequential Effects and Bidder Heterogeneity in B2B Auctions written by Alex Scott and published by . This book was released on 2017 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Heterogeneous bidding behavior by firms in business-to-business procurement auctions has recently been observed in contexts as wide-ranging as Dutch flower auctions and auctions for secondhand goods. But there has yet to be an empirical examination of what types of firms behave in which ways. We study a longitudinal dataset of spot auctions in which we observe exogenously-imposed business constraints on the bidding firms - some firms can perform work only using assets that they own and operate, while others must outsource work - i.e., brokers. These business constraints manifest themselves in strikingly different behavior by the bidding firms. Brokers bid often and with relatively high prices, while firms who operate assets bid infrequently, with low prices, and are highly affected by capacity constraints. The two types of firms have different response mechanisms in sequential auctions. Brokers adjust their prices in subsequent auctions based on whether they won or lost the previous auction, while firms who operate assets decide whether or not to place a bid. We examine other sources of heterogeneity and discuss implications for our focal industry.
Book Synopsis Sequential Auction Design and Participant Behavior by : Kendra C. Taylor
Download or read book Sequential Auction Design and Participant Behavior written by Kendra C. Taylor and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies the impact of sequential auction design on participant behavior from both a theoretical and an empirical viewpoint. In the first of the two analyses, three sequential auction designs are characterized and compared based on expected profitability to the participants. The optimal bid strategy is derived as well. One of the designs, the alternating design, is a new auction design and is a blend of the other two. It assumes that the ability to bid in or initiate an auction is given to each side of the market in an alternating fashion to simulate seasonal markets. The conditions for an equilibrium auction design are derived and characteristics of the equilibrium are outlined. The primary result is that the alternating auction is a viable compromise auction design when buyers and suppliers disagree on whether to hold a sequence of forward or reverse auctions. We also found the value of information on future private value for a strategic supplier in a two-period case of the alternating and reverse auction designs. The empirical work studies the cause of low aggregation of timber supply in reverse auctions of an online timber exchange. Unlike previous research results regarding timber auctions, which focus on offline public auctions held by the U.S. Forest Service, we study online private auctions between logging companies and mills. A limited survey of the online auction data revealed that the auctions were successful less than 50% of the time. Regression analysis is used to determine which internal and external factors to the auction affect the aggregation of timber in an effort to determine the reason that so few auctions succeeded. The analysis revealed that the number of bidders, the description of the good and the volume demanded had a significant influence on the amount of timber supplied through the online auction exchange. A plausible explanation for the low aggregation is that the exchange was better suited to check the availability for custom cuts of timber and to transact standard timber.
Book Synopsis Bidding Behavior in Sequential Cattle Auctions by :
Download or read book Bidding Behavior in Sequential Cattle Auctions written by and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Sequential Auctions with Capacity Constraints by : Isabelle Brocas
Download or read book Sequential Auctions with Capacity Constraints written by Isabelle Brocas and published by . This book was released on 2015 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: We conduct a laboratory experiment where groups of 4 subjects constrained to obtain at most one good each, sequentially bid for 3 goods in first and second price auctions. Subjects learn at the beginning of each auction their valuation for the good and exit the auction once they have obtained one good. We show that, contrary to equilibrium predictions, subjects' bidding behavior is excessively similar across units and across mechanisms at the aggregate level. We provide two (complementary) explanations for these departures. One is bounded rationality. Subjects do not fully comprehend subtle differences between mechanisms. The other is self-selection. Subjects are very heterogeneous and some of them deviate more from equilibrium than others. Since deviations take mostly the form of overbidding, these subjects win the first or second good and exit the auction, leaving those who play closer to theoretical predictions to bid for the third good. Support for this hypothesis comes from the documented higher bidding, lower efficiency and lower profits associated with the first and second unit compared to the third one.
Book Synopsis Sequential Auctions with Continuation Costs by : Richard Engelbrecht-Wiggans
Download or read book Sequential Auctions with Continuation Costs written by Richard Engelbrecht-Wiggans and published by . This book was released on 1993 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Information Revelation in Sequential Ascending Auctions by : Maher Said
Download or read book Information Revelation in Sequential Ascending Auctions written by Maher Said and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine a model in which buyers with single-unit demand are faced with an infinite sequence of auctions. In each period, a new buyer probabilistically arrives to the market, and is endowed with a constant private value. We demonstrate by way of a simple example the inefficiency of the second-price sealed-bid auction in this setting, and therefore focus instead on the ascending auction. We then show that the mechanism in which the objects are sold via ascending auctions has an efficient, fully revealing, and Markov perfect Bayesian equilibrium which is ex post optimal for all buyers in each period, given their expectations about the future. In equilibrium, all buyers completely reveal their private information in every period. However, equilibrium bidding behavior is memoryless. Bids depend only upon the information revealed in the current auction, and not on any information revealed in previous periods. This lack of memory is crucial, as it allows buyers to behave symmetrically, despite the informational asymmetry arising from the arrival of uninformed buyers. This provides the appropriate incentives for these new buyers to also reveal their information.
Book Synopsis Buyer Behavior in a Multi Object Sequential Auction by : Penny Burns
Download or read book Buyer Behavior in a Multi Object Sequential Auction written by Penny Burns and published by . This book was released on 1981 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Auctions of Identical Objects with Single-unit Demands by : Flavio M. Menezes
Download or read book Auctions of Identical Objects with Single-unit Demands written by Flavio M. Menezes and published by . This book was released on 1999 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Role of Reference-Dependent Preferences in Auctions and Negotiations by : Antonio Rosato
Download or read book The Role of Reference-Dependent Preferences in Auctions and Negotiations written by Antonio Rosato and published by . This book was released on 2013 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three chapters exploring the role that reference-dependent preferences and loss aversion play in auctions and negotiations. The first chapter characterizes the profit-maximizing pricing and product-availability strategies for a retailer selling two substitute goods to loss-averse consumers, showing that limited-availability sales can manipulate consumers into an ex-ante unfavorable purchase. When the products have similar social value, the seller maximizes profits by raising the consumers' reference point through a tempting discount on a good available only in limited supply (the bargain) and cashing in with a high price on the other good (the rip-off), which the consumers buy if the bargain is not available to minimize their disappointment. The price difference between the bargain and the rip-off is larger when the products are close substitutes than when they are distant substitutes; hence dispersion in prices and dispersion in consumers' valuations are inversely related. The seller might prefer to offer a deal on the more valuable product, using it as a bait, because consumers feel a larger loss, in terms of forgone consumption, if this item is not available and are hence willing to pay a larger premium to reduce the uncertainty in their consumption outcomes. I also show that the bargain item can be a loss leader, that the seller's product line is not welfare-maximizing and that she might supply a socially wasteful product. The second chapter studies sequential first-price and second-price auctions when bidders are expectations-based loss-averse. A large body of empirical research in auctions documents that prices of identical products sold sequentially tend to decline across auctions (a phenomenon which has been dubbed "declining price anomaly" or "afternoon effect", as often later auctions take place in the afternoon whereas the first ones usually take place in the morning) . In this chapter I argue that expectations-based reference-dependent preferences and loss aversion provide an alternative, preference-based, explanation for the afternoon effect observed in sequential auctions. First, I show that when bidders have reference-dependent preferences, the equilibrium bidding functions are history-dependent, even if bidders have independent private values. The reason is that learning the type of the winner in the previous auction modifies a bidder's expectations about how likely he is to win in the current auction; and since expectations are the reference point, the optimal bid in each round is affected by this learning effect. More precisely, I identify what I call a "discouragement effect": the higher the type of the winner in the first auction is, the less aggressively the bidding behavior of the remaining bidders in the second auction. This discouragement effect in turn pushes bidders to bid more aggressively in the earlier auction. Moreover, the uncertainty about future own bids, due to the history-dependence of the equilibrium strategies, generates a precautionary bidding effect that pushes bidders to bid less aggressively in the first auction. The precautionary bidding effect and the anticipation of the discouragement effect go in opposite directions; when the latter effect is stronger, a declining price path arises in equilibrium. The third chapter studies the role of expectations-based reference-dependent preferences and loss aversion in a sequential bargaining game with one-sided incomplete information between a seller who makes all the offers and a buyer. I show that loss aversion eases the rent-efficiency trade-off for the seller who can now serve a larger measuer of consumers at an earlier stage. Thus, in equilibrium the seller achieves higher profits and we have less delay with loss aversion than without it. Furthermore, I also show that, besides increasing the seller's profit and overall trade efficiency, loss aversion also reallocates surplus among consumers by increasing the equilibrium payoff of some low-valuation buyers and decreasing that of high-valuation ones.
Book Synopsis Synergies and Price Trends in Sequential Auctions by : Flavio F. Menezes
Download or read book Synergies and Price Trends in Sequential Auctions written by Flavio F. Menezes and published by . This book was released on 1999 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Auction Format Matters by : Mr.Robert Alan Feldman
Download or read book Auction Format Matters written by Mr.Robert Alan Feldman and published by International Monetary Fund. This book was released on 1995-05 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper evaluates the importance of auction format on bidding behavior and seller revenue, focusing on differences in performance under uniform-price and discriminatory-price formats. The analysis is based on a standard benchmark model from which empirically-testable hypotheses are derived on the optimal amount of bid shading that generates revenue equivalence between the two formats. Applying this model to data from the IMF gold auctions run in 1976-80, we find evidence of statistically significant shading in excess of the theoretically-derived optimum under the discriminatory format. This evidence suggests greater seller revenue under the uniform-price format.
Book Synopsis Common Value Auctions and the Winner's Curse by : John H. Kagel
Download or read book Common Value Auctions and the Winner's Curse written by John H. Kagel and published by Princeton University Press. This book was released on 2009-04-11 with total page 424 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Book Synopsis Auctions and Auctioneering by : Ralph Cassady Jr.
Download or read book Auctions and Auctioneering written by Ralph Cassady Jr. and published by Univ of California Press. This book was released on 2023-04-28 with total page 346 pages. Available in PDF, EPUB and Kindle. Book excerpt: This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1967.
