An Experimental Analysis of Parallel Multiple Auctions

At online auction platforms we often observed that substitutable goods are auctioned concurrently with auctions ending at the same time. I introduce an experimental setup of three sellers and four buyers in an ascending second price auction environment where every seller runs one auction with a homogeneous good and the buyers are confronted with single unit demand. I find that sellers revenue is significantly lower than theory predicts due to the fact that some auctions did not receive bids whereas other auctions concentrated the bids of all bidders. Moreover, I observe a statistically higher revenue of sellers setting the minimum starting price. Furthermore, my study shows that the buyers submit bids which are significantly lower than the private valuation every buyer receives. Comparing the efficiency of the parallel multiple auction setup to a double auction control experiment, I find a significant lower efficiency in parallel multiple auctions due to the coordination failure of the buyers.simultaneous auctions, internet auctions, market design, electronic business

Takeover contests, toeholds and deterrence.

We consider a setting in which two potential buyers, one with a prior toehold and one without, compete in a takeover modeled as an ascending auction with participating costs. The toeholder is more aggressive during the takeover process because she is also a seller of her own shares. The non-toeholder anticipates this extra-aggressiveness of the toeholder. Thus, he is deterred from participating unless he has a high valuation for the target company. This leads to large inefficiency losses. For many configurations, expected target returns are first increasing then decreasing in the size of the toehold.deterrence; toeholds; ascending auctions; Takeovers;

airline revenue management

With the increasing interest in decision support systems and the continuous advance of computer science, revenue management is a discipline which has received a great deal of interest in recent years. Although revenue management has seen many new applications throughout the years, the main focus of research continues to be the airline industry. Ever since Littlewood (1972) first proposed a solution method for the airline revenue management problem, a variety of solution methods have been introduced. In this paper we will give an overview of the solution methods presented throughout the literature.revenue management;seat inventory control;OR techniques;mathematical programming

How do markets manage water resources?. An experiment on resource market (de) centralization with endogenous quality.

We test how a monopoly, a duopoly and a public monopoly manage and allocate water resources. Stock depletion for the public monopoly is fastest. However, it reaches the optimal stock level towards the end of the experimental sessions. The private monopoly and duopoly maintain inefficiently high levels of stock throughout the sessions. The average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly. A clear result from the experiments is that a public monopoly offers the highest (average) quality to price ratio and has the fastest rate of stock depletion compared to a private monopoly or duopoly

Congestion Control and Vehicle Ownership Restriction: The Choice of an Optimal Quota Policy

Singapore introduced a vehicle quota system (VQS) in 1990 as part of its overall policy to control urban congestion. While the VQS has reduced the annual growth rate of the vehicle population to about 3%, it has created uncertainty in the cost of vehicle ownership due to the fluctuations in license prices. The paper discusses three issues relating to the optimal design of a VQS: license transferability, subcategorization and the choice of an auction format. Our analysis shows that license transferability is not unambiguously desirable, sub-categorization is highly regressive, and an open auction format results in less aggressive bidding and lower license prices.congestion control, vehicle ownership, optimal quota, transport policy

Allocative and Informational Externalities in Auctions and Related Mechanisms

We study the effects of allocative and informational externalities in (multi-object) auctions and related mechanisms. Such externalities naturally arise in models that embed auctions in larger economic contexts. In particular, they appear when there is downstream interaction among bidders after the auction has closed. The endogeneity of valuations is the main driving force behind many new, specific phenomena with allocative externalities: even in complete information settings, traditional auction formats need not be efficient, and they may give rise to multiple equilibria and strategic non-participation. But, in the absence of informational externalities, welfare maximization can be achieved by Vickrey-Clarke- Groves mechanisms. Welfare-maximizing Bayes-Nash implementation is, however, impossible in multi-object settings with informational externalities, unless the allocation problem is separable across objects (e.g. there are no allocative externalities nor complementarities) or signals are one-dimensional. Moreover, implementation of any choice function via ex-post equilibrium is generically impossible with informational externalities and multidimensional types. A theory of information constraints with multidimensional signals is rather complex, but indispensable for our study

Incentive Mechanisms for Hierarchical Spectrum Markets

In this paper, we study spectrum allocation mechanisms in hierarchical multi-layer markets which are expected to proliferate in the near future based on the current spectrum policy reform proposals. We consider a setting where a state agency sells spectrum channels to Primary Operators (POs) who subsequently resell them to Secondary Operators (SOs) through auctions. We show that these hierarchical markets do not result in a socially efficient spectrum allocation which is aimed by the agency, due to lack of coordination among the entities in different layers and the inherently selfish revenue-maximizing strategy of POs. In order to reconcile these opposing objectives, we propose an incentive mechanism which aligns the strategy and the actions of the POs with the objective of the agency, and thus leads to system performance improvement in terms of social welfare. This pricing-based scheme constitutes a method for hierarchical market regulation. A basic component of the proposed incentive mechanism is a novel auction scheme which enables POs to allocate their spectrum by balancing their derived revenue and the welfare of the SOs.Comment: 9 page

The European UTMS/IMT2000 license auctions

We survey the recent European UMTS license auctions and compare their outcomes with the predictions of a simple model that emphasizes future market structure as a main determinant of valuations for licenses. Since the main goal of most spectrum allocation procedures is economic efficiency, and since consumers (who are affected by the ensuing market structure) do not participate at the auction stage, good designs must alleviate the asymmetry among incumbents and potential entrants by actively encouraging entry