2,572 research outputs found
The Timing of Bid Placement and Extent of Multiple Bidding: An Empirical Investigation Using eBay Online Auctions
Online auctions are fast gaining popularity in today's electronic commerce.
Relative to offline auctions, there is a greater degree of multiple bidding and
late bidding in online auctions, an empirical finding by some recent research.
These two behaviors (multiple bidding and late bidding) are of ``strategic''
importance to online auctions and hence important to investigate. In this
article we empirically measure the distribution of bid timings and the extent
of multiple bidding in a large set of online auctions, using bidder experience
as a mediating variable. We use data from the popular auction site
\url{www.eBay.com} to investigate more than 10,000 auctions from 15 consumer
product categories. We estimate the distribution of late bidding and multiple
bidding, which allows us to place these product categories along a continuum of
these metrics (the extent of late bidding and the extent of multiple bidding).
Interestingly, the results of the analysis distinguish most of the product
categories from one another with respect to these metrics, implying that
product categories, after controlling for bidder experience, differ in the
extent of multiple bidding and late bidding observed in them. We also find a
nonmonotonic impact of bidder experience on the timing of bid placements.
Experienced bidders are ``more'' active either toward the close of auction or
toward the start of auction. The impact of experience on the extent of multiple
bidding, though, is monotonic across the auction interval; more experienced
bidders tend to indulge ``less'' in multiple bidding.Comment: Published at http://dx.doi.org/10.1214/088342306000000123 in the
Statistical Science (http://www.imstat.org/sts/) by the Institute of
Mathematical Statistics (http://www.imstat.org
A typology of foreign exchange auction markets in sub-Saharan Africa : dynamic models for auction exchange rates
In this analytical sequel to"A Typology of Foreign Exchange Auction Markets in sub-Saharan Africa", the authors compare the micromanagement of different foreign exchange auctions in sub-Saharan Africa. Multi-unit auctions for foreign exchange were introduced in a number of countries in the 1980s and 1990s, in a transitional step toward a credible, sustainable, unified regime, such as efficient interbank market. But there is little understanding of how auction markets function in sub-Saharan Africa, and there has been virtually no research on the causes of frequent policy reversals or of auction failure. One possible cause of failure -- apart from thin markets, macroeconomic laxity, and vulnerability to terms-of-trade shocks and fluctuations in the disbursement of foreign aid -- is the inappropriate design and management of auctions. The authors estimate models for the microdeterminants of the auction rate, using weekly data on foreign exchange auctions for Ghana, Nigeria, Uganda, and Zambia. Among the policy lessons: 1) Nigeria and Zambia failed to unify and stabilize the exchange rate partly because there was no reserve price rule. When bidders learn such a rule, speculative bidding diminishes. 2) The management of a credible, sustainable reserve price policy requires an efficient secondary market. A simple underlying model, synthesized from the theoretical literature on auctions, specifies the auction rate as a function of fundamental variables and structural shift dummies. The repeated, sequential nature of these multi-unit auctions and the nonstationary nature of most of the auction variables are captured empirically by a cointegrated (error connection) framework. In addition to consistently estimating long-run and short-run parameters of auction fundamentals, the error correction model allows asymptotically efficient testing of three policy hypotheses deriving from auction theory: the competitiveness hypothesis, the effect of uncertainty on the auction-determined rate, and the revenue-equivalence hypothesis. In other words, they used these models to test the impact on the level of the auction rate of increased comptetition among bidders, of the effect of uncertainty (proxied by a volatile supply of foreign exchange), and of different pricing mechanisms.International Terrorism&Counterterrorism,Economic Theory&Research,Markets and Market Access,Access to Markets,Environmental Economics&Policies
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Boundedly rational versus optimization-based models of strategic thinking and learning in games
The paper is a comment on the article by R. Harstad and R. Selten and considers the tradeoff between bounded rationality and optimization models in the game-theoretic context. The author shows that in most of the models elements of opimization are still retained and that it is thus more productive to further improve the optimization-based modeling rather than to abandon them altogether in favour of bounded rationality
Your call: eBay and demand for the iPhone 4
The iPhone 4 was introduced into the UK market on 24th June 2010 to significant consumer interest. This clearly exceeded supply through conventional channels, since there was very extensive activity in terms of bidding on eBay auctions for the product. We monitored all eBay transactions on the iPhone 4 for six weeks from introduction, with total transactions amounting to around ÂŁ1.5m. We analyse determinants of the winning bid in terms of characteristics of the phone, the seller and the buyer. Our most notable and novel finding relative to previous studies is a very significant premium over list price being paid in almost all cases, with positive uplift factors including whether the phone was unlocked and whether it could be sold overseas. Demand fell over time, as evidenced by lower achieved prices, but the fall in price was relatively modest. A significant premium of 32GB over 16GB versions is revealed.eBay auctions ; demand revelation ; auctions ; bidding ; short supply ; versioning JEL Classification: D44 ; L81 ; D12 ; L63
Discriminatory vs Uniform Price Auction: Auction Revenue
We compare auction revenues from discriminatory auctions and uniform price auctions in the case of the Korean treasury bonds auction market. For this purpose, we employ detailed bidder level data for each of 16 discriminatory auctions recently carried out in Korea. We first theoretically recover unobserved individual bidding functions under counter-factual uniform price auctions from the observed bidding functions under the actual discriminatory auctions, and then empirically estimate revenue differences. To test significance of the auction revenue differences, we use Bootstrap re-sampling methods where uncertainty in the cut-off yield spreads and uncertainty in the bidders are addressed individually as well as simultaneously. Our results indicate that uniform price auction increases the auction revenue relative to the discriminatory auction in most of the 16 cases, justifying the Korean governmentâs decision to switch to the uniform price auction mechanism in August 2000Treasury bonds auction, discriminatory auction, uniform price auction, hazard rate, Bootstrap re-sampling, yield spread, bidding function, bid shading
An Experimental Analysis of Ending Rules in Internet Auctions
A great deal of late bidding has been observed on internet auctions such as eBay, which employ a second price auction with a fixed deadline. Much less late bidding has been observed on internet auctions such as those run by Amazon, which employ similar auction rules, but use an ending rule that automatically extends the auction if necessary after the scheduled close until ten minutes have passed without a bid. This paper reports an experiment that allows us to examine the effect of the different ending rules under controlled conditions, without the other differences between internet auction houses that prevent unambiguous interpretation of the field data. We find that the difference in auction ending rules is sufficient by itself to produce the differences in late bidding observed in the field data. The experimental data also allow us to examine how individuals bid in relation to their private values, and how this behavior is shaped by the different opportunities for learning provided in the auction conditions.
Optimal Auctions with Financial Externalities
We construct optimal auctions when bidders face financial externalities.In a Coasean World, in which the seller cannot prevent a perfect resale market, nor withhold the object, the lowest-price all-pay auction is optimal.In a Myersonean World, in which the seller can both prevent resale after the auction, and fully commit to not selling the object, an optimal two-stage mechanism is derived.In the first stage, bidders are asked to pay an entry fee.In the second stage, bidders play the lowest-price all-pay auction with a reserve price.In both worlds, the expected revenue is increasing in the financial externality, and each bidder's expected utility is independent of the financial externality.Optimal auctions;financial externalities;lowest-price allpay auction;Coasean World;Myersonean World
IMPACT OF CHANGING CONSUMER PREFERENCES ON WILLINGNESS-TO-PAY FOR BEEF STEAKS IN ALTERNATIVE RETAIL PACKAGING
The purpose of this study was to identify how consumer perceptions of selected attributes of beef steaks, individual consumer demographics and perceived changes in purchases of substitute meats affect willingness-to-pay for beef rib-eye steaks in the traditional overwrapped styrofoam tray and vacuum skin packages. A laboratory auction was used to obtain willingness-to-pay data. The results suggest that health related factors, particularly the concern regarding cholesterol, reduced the willingness-to-pay for beef rib-eye steaks, regardless of package type. For the vacuum skin package to be successful, information about the package is necessary, along with providing a consistent and quality product, particularly with respect to trim.Consumer/Household Economics,
Integrating the Structural Auction Approach and Traditional Measures of Market Power
This study asks the question, what is the relationship between traditional models of market power and structural auction models? An encompassing model is derived that considers both price markdowns due to bid shading during an auction and price markdowns at the industry-level due to imperfect competition. Data from a cattle procurement experimental market is used to compare the appropriateness of the two alternative theories. Regression results show that while the number of firms is more important than the number of bidders on lot of cattle in explaining pricing behavior in the game, the number of bidders does contain some unique information and should be included in the model. Both the traditional NEIO and structural auction approaches overestimated the true markdowns possibly due to failure to account for the winner's curse.Marketing,
Bidding Markets
The existence of a âbidding marketâ is commonly cited as a reason to tolerate the creation or maintenance of highly concentrated markets. We discuss three erroneous arguments to that effect: the âconsultantsâ fallacyâ that âmarket power is impossibleâ, the âacademicsâ fallacyâ that (often) âmarket power does not matterâ, and the âregulatorsâ fallacyâ that âintervention against pernicious market power is unnecessaryâ, in markets characterized by auctions or bidding processes. Furthermore we argue that the term âbidding marketâ as it is widely used in antitrust is unhelpful or misleading. Auctions and bidding processes do have some special featuresâincluding their price formation processes, common-values behaviour, and bid-taker powerâbut the significance of these features has been overemphasized, and they often imply a need for stricter rather than more lenient competition policy.Bidding Markets, Auctions, Antitrust, Competition Policy, Bidding, Market Power, Private Values, Common Values, Anti-trust
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