Analysis of Ausubel auctions by means of evolutionary computation

IEEE Congress on Evolutionary Computation. Edimburgo, 2-5 September 2005The increasing use of auctions has led to a growing interest in the subject. A recent method used for carrying out examinations on auctions has been the design of computational simulations. The aim of this paper is to develop a genetic algorithm to find bidders' optimal strategies for a specific dynamic multi-unit auction. The algorithm provides the bidding strategy (defined as the action to be taken under different auction conditions) that maximizes the bidder's payoff. The algorithm is tested under several experimental environments, number of bidders and quantity of lots auctioned. The results suggest that the approach leads to strategies that outperform canonical strategies

The failure of the revenue equivalence principle: multiple objects, information acquisition and favoritism

A celebrated result of auction theory is the revenue equivalence principle which states that with independent private values and a single unit for sale all selling (or procurement) mechanisms that give the object to the bidder with the highest valuation generate the same revenue. The present thesis explores in each chapter a different deviation from the revenue equivalence princi- ple and compares selling (or procurement) mechanisms that would be equivalent otherwise. In chapter two the equivalence between the first-price auction and the descending auction fails if more than one unit is for sale. In chapter three and four the equivalence between all four of the standard auction formats fails in the case that bidders are not fully informed about their private valuation and may acquire additional information in the course of the auction. The fifth chapter theoretically analyzes the differences between optimal auctions and negotiations that can only arise in the presence of favoritism

Two Auction-Based Resource Allocation Environments: Design and Experience

Many computer systems have reached the point where the goal of resource allocation is no longer to maximize utilization; instead, when demand exceeds supply and not all needs can be met, one needs a policy to guide resource allocation decisions. One natural policy is to seek efficient usage, which allocates resources to the set of users who have the highest utility for the use of the resources. Researchers have frequently proposed market-based mechanisms to provide such a goal-oriented way to allocate resources among competing interests while maximizing overall utility of the users.Engineering and Applied Science

Essays in three design issues in experimental auctions

Doctor of PhilosophyDepartment of Agricultural EconomicsJohn A. (Sean) FoxThe objective of this thesis is to investigate three design issues in experimental auctions: 1) the effects of allowing negative bids for a privately valued good, 2) the effects of introducing additional alternatives (substitutes) for the auctioned good in an endowment auction, and 3) respondent behavior in acquiring information. The thesis consists of three papers examining those issues. The first paper examines participants’ bidding behavior when negative bids are allowed for privately valued goods in an experimental auction. We focus on two questions: i) whether subjects with negative values tend to bid strategically – either overbidding or underbidding in an effort to enhancing earnings, and ii) the performance of random nth and 5th price auctions. We find that: a) WTP bids are demand revealing, b) subjects tend to underbid WTA values, c) controlling for risk attitude partially explains the bias in WTA bids, and d) negative values from random nth auctions tend to be below those from 5th price auctions. In the second paper we 1) investigate the effect of the availability of varying numbers of alternatives (substitutes) for a privately valued good on participants’ bidding behavior, and 2) identify whether the availability of additional alternatives: a) impacts the value of product information, and b) impacts the effect of new information on product valuations. We find that: a) allowing additional alternatives in a private value auction does not significantly decrease subjects’ bids, and b) the presence of additional alternatives in the auction decreases both the value and effect of product information. The third paper examines the effect of acquired information on auction participants’ bidding behavior. We focus on three questions: i) how subjects choose/value different types of information, ii) whether the value of acquired information about a product influences the subsequent valuation of the product itself, and iii) whether the effects of acquired information differ from those of exogenously provided information. We find that: a) subjects’ behaviors of acquiring different types of information about the product are influenced by their heterogeneous characteristics (i.e. prior beliefs, risk attitudes, prior knowledge, etc.), b) subjects place more weight on acquired information than on provided information in their decision-making process, and c) individual subjects have different values of information which caused different impacts on product valuation

Topics in Behavioural Economics - Information and Fairness. Revised edition

This thesis dwells upon topics in behavioural economics: information and fairness, with five research papers. The first two contributions are concerned with the extension of standard auction formats with information acquisition strategies. The third paper addresses global games framed as a speculative attack and tests theoretical predictions for risk and ambiguity. The fourth contribution deals with disclosing conflicts of interest, where one player has a monetary incentive to deceive. The last paper extends a standard model of social preferences with a second fairness dimension and studies how economic agents distort fairness norms exhibiting a self-serving bias effect

Large-scale Multi-item Auctions : Evidence from Multimedia-supported Experiments

This book presents two experimental studies that deal with the comparison of multi-item auction designs for two specific applications: the sale of 2.6 GHz radio spectrum rights in Europe, and the sale of emissions permits in Australia. In order to tackle the complexity of these experiments, a cognitively based toolkit is proposed, including modularized video instructions, comprehension tests, a learning platform, a graphical one-screen user interface, and comprehension-based group matching