Approaching Utopia: Strong Truthfulness and Externality-Resistant Mechanisms

We introduce and study strongly truthful mechanisms and their applications. We use strongly truthful mechanisms as a tool for implementation in undominated strategies for several problems,including the design of externality resistant auctions and a variant of multi-dimensional scheduling

Securities Auctions under Moral Hazard: An Experimental Study

We study, both theoretically and in the lab, the performance of open outcry debt and equity auctions in the presence of both private information and hidden e¤ort in an independent private value setting. We characterize symmetric equilibrium bidding strategies and show that these lead to e¢ cient allocation. More interestingly, the revenue ranking between the debt and equity auctions depends on the returns to en- trepreneurial e¤ort. When returns are either very low or vary high, the equity auction leads to higher expected revenues to the seller than does the debt auction. When the returns to e¤ort are intermediate, we show that debt auctions can outperform equity auctions. We then test these predictions in a controlled laboratory setting and …nd broad support for the comparative predictions of the model.

Auctions with Anticipated Regret

This paper demonstrates theoretically and experimentally that in first price auctions, overbidding with respect to risk neutral Nash equilibrium might be driven from anticipated loser regret (felt when bidders lose at an affordable price). Different information structures are created to elicit regret: bidders know they will learn the winning bid if they lose (loser regret condition); or the second highest bid if they win (winner regret condition); or no information regarding the other bids. Bidders only in loser regret condition anticipated regret and significantly overbid; in the other conditions bidders did not anticipate regret and hence did not overbid.overbidding, first price auction, anticipated regret

The impact of the irrelevant – Temporary buy-options and bidding behavior in online auctions

In a laboratory experiment, we investigate the impact of temporary buy-options on efficiency, revenues, and bidding behavior in online proxy-auctions when bidders have independent private valuations. We show that the introduction of a buy-option reduces efficiency and at the same time fails to enhance revenues. In particular, we observe that the former presence of a temporary buy-option lowers final prices in an auction (even though the option is no longer available once an auction has started). If bidders have imprecise information about their private value, auction prices are increasing in the price of the buy-option which suggests anchoring as an explanation. Surprisingly, the former presence of a temporary buy-option also tends to reduce final auction prices if bidders are perfectly informed about their private value. In fact, we demonstrate that bidders are reluctant to bid above the option price regardless of the precision of their private information and the price of the option.microeconomics ;

Asymmetric information about rivals' types in standard auctions: An experiment

This paper studies experimentally how information about rivals' types affects bidding behavior in first- and second-price auctions. The comparative static hypotheses associated with information about rivals enables us to test the relevance of such information as well as the general predictions of the auction theory, by providing an effective means to control for risk aversion and other behavioral motives that were difficult to control for in previous experiments. Our experimental evidence provides strong support for the theory, and sheds light on the roles of risk aversion and the spite motive in first- and second-price auctions, respectively

05011 Abstracts Collection -- Computing and Markets

From 03.01.05 to 07.01.05, the Dagstuhl Seminar 05011``Computing and Markets\u27\u27 was held in the International Conference and Research Center (IBFI), Schloss Dagstuhl. During the seminar, several participants presented their current research, and ongoing work and open problems were discussed. Abstracts of the presentations given during the seminar as well as abstracts of seminar results and ideas are put together in this paper. The first section describes the seminar topics and goals in general. Links to extended abstracts or full papers are provided, if available