Optimal Bidding in the Mexican Treasury Securities Primary Auctions: Results of a Structural Econometric Approach

This analysis of the Mexican Treasury securities primary auctions suggests that the uniform format yields higher revenues than the discriminatory format. It applies the structural econometric model proposed by Février, Préget, and Visser (2004). This modTreasury securities, share auction, Mexico

Estimation and Comparison of Treasury Auction Formats when Bidders are Asymmetric.

The structural parameters of a share-auction model accounting for asymmetry across bidders, as well as supply uncertainty are estimated with a sample of French Treasury auctions. We find evidence of both informational and risk aversion asymmetries between bidders. A counter-factual analysis also suggests that, in the context of the French Treasury auctions, a shift from the discriminatory to the uniform-price format would simultaneously benefit the French Treasury and the auction's participants.

An Experimental Test of Design Alternatives for the British 3G / UMTS Auction

In spring 2000, the British government auctioned off licences for Third Generation mobile telecommunications services. In the preparation of the auction, two designs involving each a hybrid of an English and a sealed-bid auction were suggested by the government: a discriminatory and a uniform price variant. We report an experiment on these two designs, and also compare the results to those with a pure English auction. Both hybrids are similar in efficiency, revenue differences disappear as bidders get experienced. Compared to the discriminatory format, the pure English auction gives new entrants better chances.Spectrum auctions, UMTS, experiments

share auctions with linear demands

abstract: Buyers have private information on auctioning divisible goods. Linearity could be a useful property on measuring their marginal utility on those goods or on their bidding strategies under such a share auction environment. This paper establishes an auction model with independent private-values paradigm (IPVP) where bidders have linear demand. A mechanism design approach is applied to explore the optimal share auction in this model. I discuss the most popular auction formats in practice, including Vickrey auction (VA), uniform-price auction (UPA) and discriminatory price auction (DPA). The ex-post equilibriums on explicit solutions are achieved. I found VA does not generally constitute an optimal mechanism as expected even in a symmetric scenario. Furthermore, I rank the different auction formats in terms of revenue and social efficiency. The more private information bidders keep, the lower revenue VA generates to seller, and it could be even inferior to UPA or DPA. My study aggregates dispersed private information with linearity and is robust to distributional assumption.Dissertation/ThesisPh.D. Economics 201

Uniform vs. Discriminatory Auctions with Variable Supply - Experimental Evidence

In the variable supply auction considered here, the seller decides how many costumers with unit demand to serve after observing their bids. Bidders are uncertain about the seller's cost. We experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting. Exactly as predicted by theory, it turns out that the uniform price auction produces substantially higher bids, and consequently yields higher revenues and profits for the seller. Somewhat surprisingly but again predicted by theory, it also yields a higher number of transactions, which makes it the more efficient auction format.

The Role of Auctions in Allocating Public Resources

This paper provides an economic framework within which to consider the effectiveness and limitations of auction markets. The paper looks at the use of auctions as a policy instrument and the effects of auction design on consumer interests, the efficient allocation of resources, and industry competitiveness.Australia; Research; Ascending-bid auction; Auctions; Bidders; Conservation funds; Descending-bid auction; Dutch auction; English auction; Environmental Management; First-price sealed-bid auction; Infrastructure; Markets; Oral auction; Outcry auction; Pollutant emission permits; Power supply contracts; Public resources; Radio- spectrum; Second-price sealed-bid auction Spectrum licences; Vickrey auction; Water rights;

Strategic Behavior and Underpricing in Uniform Price Auctions

We study uniform price auctions using a dataset which includes individual bidders' demand schedules in Finnish Treasury auctions during the period 1992-99. Average underpricing amounts to .041% of face value. Theory suggests that underpricing may result from monopsonistic market power. We develop and test robust implications from this theory and ¯nd that it has little support in the data. For example, bidders' individual demand functions do not respond to increased competition in the manner predicted by the theory. We also present evidence that the Finnish Treasury acts strategically, taking into account the fact that the auctions are part of a repeated game between the Treasury and the primary dealers. Empirically, the main driver behind bidder behavior and underpricing is the volatility of bond returns. Since there is no evidence that bidders are risk averse, this suggests that private information and the winner's curse may play an important role in these auctions.Multiunit auctions, uniform price auctions, treasury auctions, market power, demand functions, underpricing, supply uncertainty, seller behavior

Uniform vs. Discriminatory Auctions with Variable Supply - Experimental Evidence

In the variable supply auction considered here, the seller decides how many costumers with unit demand to serve after observing their bids. Bidders are uncertain about the seller's cost. We experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting. Exactly as predicted by theory, it turns out that the uniform price auction produces substantially higher bids, and consequently yields higher revenues and profits for the seller. Somewhat surprisingly but again predicted by theory, it also yields a higher number of transactions, which makes it the more efficient auction format.auctions, experiment, discriminatory, uniform

Asymmetric demand information in uniform and discriminatory call auctions: an experimental analysis motivated by electricity markets

We study the outcomes of experimental multi-unit uniform and discriminatory auctions with demand uncertainty. Our study is motivated by the ongoing debate about market design in the electricity industry. Our main aim is to compare the effect of asymmetric demand-information between sellers on the performance of the two auction institutions. In our baseline conditions all sellers have the same information, whereas in our treatment conditions some sellers have better information than others. In both information conditions we find that average transaction prices and price volatility are not significantly different under the two auction institutions. However, when there is asymmetric information among sellers the discriminatory auction is significantly less efficient. These results are not in line with the typical arguments made in favor of discriminatory pricing in electricity industries; namely, lower consumer prices and less price volatility. Moreover, our results provide some indication that discriminatory auctions reduce technical efficiency relative to uniform auctions.Experiments, asymmetric information, discriminatory price auctions, uniform price auctions, electricity industries