1,164 research outputs found

    Information Disclosure in Open Non-Binding Procurement Auctions: an Empirical Study

    Get PDF
    The outcome of non-binding reverse auctions critically depends on how information is distributed during the bidding process. We use data from a large European procurement platform to study the impact of different information structures, specifically the availability of quality information to the bidders, on buyers' welfare and turnover of the platform. First we show that on the procurement platform considered bidders indeed are aware of their rivals' characteristics and the buyers preferences over those non-price characteristics. In a counterfactual analysis we then analyze the reduction of non-price information available to the bidders. As we find, platform turnovers in the period considered would decrease by around 30%, and the buyers' welfare would increase by the monetary equivalent of around 45% of turnover of the platform

    Information Disclosure in Procurement Auctions with Horizontally Differentiated Suppliers

    Get PDF
    This work studies a model of multidimensional auction in which a buyer needs to procure a given good from either of two potential suppliers whose quality is the buyer's private information and whose production costs are heterogeneous. Costs asymmetries constitute a novelty in this framework and extend e.g. the model of Gal-Or et al. (2007). We compare the outcomes of different procurement policies from the viewpoint of both efficiency and the buyer's payoff. A trade-off between efficiency and rent-extraction emerges. The buyer will maximize her expected utility by selecting a first score auction and either concealing or privately revealing suppliers'quality - the optimal choice depending on the degree of heterogeneity in suppliers' costs and qualities. However, neither of these auction mechanisms will be efficient: efficiency calls for a second score auction or a first score auction with public disclosure of suppliersquality. The findings hinge on the equivalence between auction models and models of horizontal differentiation and take advantage of results for asymmetric auctions developed by Maskin & Riley (2000).multidimensional auctions, procurement policies, endogenous information, horizontal di€erentiation, asymmetric auctions.

    Why Every Economist Should Learn Some Auction Theory

    Get PDF
    This is an Invited paper for the World Congress of the Econometric Society held in Seattle in August 2000. We discuss the strong connections between auction theory and "standard" economic theory, and argue that auction-theoretic tools and intuitions can provide useful arguments and insights in a broad range of mainstream economic settings that do not, at first sight, look like auctions. We also discuss some more obvious applications, especially to industrial organization.Auctions, Bidding, Auction Theory, Private Values, Common Values, Mechanism Design, Litigation, Stock Markets, Queues, Financial Crashes, Brand Loyalty, War of Attrition, Bertrand, Perfect Competition, E-Commerce, Spectrum Auctions, Treasury Auctions, Electricity

    Collusive market allocations

    Get PDF
    Collusive schemes by suppliers often take the form of allocating customers or markets among cartel members. We analyze incentives for suppliers to initiate and sustain such a collusive schemes in a repeated procurement setting. We show that, contrary to some prevailing beliefs, staggered (versus synchronized) purchasing does not make collusion more difficult to sustain or initiate. Buyer defensive measures include synchronized rather than staggered purchasing, first-price rather than second-price auctions, more aggressive or secrete reserve prices, longer contract lengths, withholding information, and avoiding observable registration procedures. Inefficiency induced by defensive measures is an often unrecognized social cost of collusive conduct

    A Troubled Asset Reverse Auction

    Get PDF
    The US Treasury has proposed purchasing $700 billion of troubled assets to restore liquidity and solve the current financial crisis, using market mechanisms such as reverse auctions where appropriate. This paper presents a high-level design for a troubled asset reverse auction and discusses the auction design issues. We assume that the key objectives of the auction are to: 1) provide a quick and effective means to purchase troubled assets and increase liquidity; 2) protect the taxpayer by yielding a price for assets related to their value; and 3) offer a transparent rules-based process that minimizes discretion and favoritism. We propose a two-part approach. Part 1. Groups of related securities are purchased in simultaneous descending clock auctions. The auctions operate on a security-by-security basis to avoid adverse selection. To assure that the auction for each security is competitive, the demand for each security is capped at the total quantity offered by all but the largest three sellers. Demand bids from private buyers are also allowed. The simultaneous clock auctions protect the taxpayer by yielding a competitive price for each security and allow bidders to manage liquidity constraints and portfolio risk. The resulting price discovery also improves the liquidity of the securities that are not purchased in the auctions. Part 2. Following Part 1, the remaining quantity is purchased in descending clock auctions in which many securities are pooled together. To minimize adverse selection, reference prices are calculated for each security from a model that includes all of the characteristics of each security including the market information revealed in the security-by-security auctions of Part 1. Bids in the pooled auctions are specified in terms of a percentage of the reference price for each security.Auctions, financial auctions, financial crisis

    Online reverse auctions research in marketing versus SCM: A review and future directions

    Get PDF
    An online reverse auction (ORA) is a dynamic procurement mechanism that allows suppliers to compete in real time via a platform to gain a buyer’s business. The ORA is a technological tool introduced in the late 1990s, gaining proponents and detractors among practitioners and academics. Remarkably, while practitioner interestin ORAs has grown, related marketing and supply chain management (SCM) research has declined. This contradiction between theory and practice suggests the need to conduct a systematic review to provide readers with a state-of-the-art understanding of ORAs and recommend fruitful avenues for further research. We focus on the marketing literature and contrast the findings with SCM literature, in such an analysis practical relevance is stressed. Our study offers three main contributions: (1) integration of the cumulative marketing knowledge on ORAs in the 2002–2020 period, (2) development of a three-layer framework of the ORA domain (i.e., conceptualization, ORA as a process, and research setting), and (3) construction of a new research agenda to deal with scholarly challenges and emerging trends.Xunta de Galicia | Ref. GPC ED431B 2022/10Universidade de Vigo/CISU

    Comments on the RGGI Market Design

    Get PDF
    Auctions, carbon auctions, greenhouse gas auctions
    • 

    corecore