Auction Design and the Success of National 3G Spectrum Auctions

This study empirically examines a sample of national wireless spectrum assignments for the period 2000-2007 to identify the sources of revenue variations. An econometric model that recognises the censored nature of the sample relates per capita winning bid (per Mhz) values to auction design variables (license award process), national and mobile market conditions, spectrum package attributes and post-award obligations identified from national regulatory authority tender documents. The analysis reveals that most auction design variables independently impact on realized 3G spectrum auction revenue in a manner consistent with auction theory.Wireless telephone markets, 3G spectrum auctions, spectrum bid price

Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile

Field experiments were conducted with farmers in the Limarí Valley of Chile to test extant theory on right-to-choose auctions. Water volumes that differed by reservoir source and time of availability were offered for sale by the research team. The auctions were supplemented by protocols to elicit risk and time preferences of bidders. We find that the right-to-choose auctions raise significantly more revenue than the benchmark sequential auction. Risk attitudes explain a substantial amount of the difference in bidding between auction institutions, consonant with received theory. The auction bidding revealed distinct preferences for water types, which has implications for market re-design.auction design, field experiments,water market

Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile

Field experiments were conducted with farmers in the Limarí Valley of Chile to test extant theory on right-to-choose auctions. Water volumes that differed by reservoir source and time of availability were offered for sale by the research team. The auctions were supplemented by protocols to elicit risk and time preferences of bidders. We find that the right-to-choose auctions raise significantly more revenue than the benchmark sequential auction. Risk attitudes explain a substantial amount of the difference in bidding between auction institutions, consonant with received theory. The auction bidding revealed distinct preferences for water types, which has implications for market re-design.water market, field experiment, auction design, Farm Management, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Risk and Uncertainty,

Inefficiencies in the sale of ideas: theory and empirics

The sale of ideas (e.g. through licensing) facilitates vertical specialization and the division of labor between research and development. This specialization can improve the overall efficiency of the innovative process. However, these gains depend on the timing of the sale: the buyer of an idea should assume development at the stage at which he has an efficiency advantage. We show that in an environment with asymmetric information about the value of the idea and where this asymmetry decreases as the product is developed, the seller of the idea may delay the sale to the more efficient firm, thus incurring higher development costs. We obtain a condition for the equilibrium timing of the sale and examine how factors such as the intensity of competition between potential buyers influence it. Empirical analysis of licensing contracts signed between firms in the pharmaceutical industry supports our theoretical predictions.Innovation, Licensing, Market structure, Bargaining, Pharmaceuticals, Biotechnology.

Essays on Information Flows and Auction Outcomes in Business-to-Business Market: Theoretical and Empirical Evidence

In this dissertation, I have three separate essays in the context of Business-to Business (B2B) auctions; in each I introduce a complex problem regarding the impact of information flows on auction's performance which has not been addressed by prior auction literature. The first two essays (Chapter 1 and 2) are empirical studies in the context of online secondary market B2B auctions while the third essay (Chapter 3) is a theoretical investigation and will contribute to the B2B procurement auction literature. The findings from this dissertation have managerial implications of how/when auctioneers can improve the efficiency or success of their operations. B2B auctions are new types of ventures which have begun to shape how industries of all types trade goods. Online B2B auctions have also become particularly popular for industrial procurement and liquidation purposes. By using online B2B auctions companies can benefit by creating competition when auctioning off goods or contracts to business customers. B2B Procurement auctions− where the buyer runs an auction to procure goods and services from suppliers− have been documented as saving firms millions of dollars by lowering the cost of procurement. On the other hand, B2B auctions are also commonly used by sellers in `secondary market' to liquidate the left-over goods to business buyers in a timely fashion. In order to maximize revenues in either both industrial procurement or secondary market settings, auctioneers should understand how the auction participants behave and react to the available market information or auction design. Auctioneers can then use this knowledge to improve the performance of their B2B auctions by choosing the right auction design or strategies. In the first essay, I investigate how an online B2B secondary market auction environment can provide several sources of information that can be used by bidders to form their bids. One such information set that has been relatively understudied in the literature pertains to reference prices available to the bidder from other concurrent and comparable auctions. I will examine how reference prices from such auctions affect bidding behavior on the focal auction conditioning on bidders' types. I will use longitudinal data of auctions and bids for more than 4000 B2B auctions collected from a large liquidator firm in North America. In the second essay, I report on the results of a field experiment that I carried out on a secondary market auction site of another one of the nation's largest B2B wholesale liquidators. The design of this field experiment on iPad marketplace is directly aimed at understanding how (i) the starting price of the auction, and (ii) the number of auctions for a specific (model, quality), i.e., the supply of that product, interact to impact the auction final price. I also explore how a seller should manage the product differentiation so that she auctions off the right mix and supply of products at the reasonable starting prices. Finally, in the last essay, I study a norm used in many procurement auctions in which buyers grant the `Right of First Refusal' (ROFR) to a favored supplier. Under ROFR, the favored supplier sees the bids of all other participating suppliers and has the opportunity to match the (current) winning bid. I verify the conventional wisdom that ROFR increases the buyer's procurement cost in a single auction setting. With a looming second auction in the future (with the same participating suppliers), I show that the buyer lowers his procurement cost by granting the ROFR to a supplier. The analytical findings of this essay highlights the critical role of information flows and the timing of information-release in procurement auctions with ROFR

Overweight Vehicle Permitting Alternatives

Overweight vehicles exceed the federal and/or state statutory limits for either the gross vehicle weight (GVW) or the weight of individual axles or axle groups. National and state limits on vehicle weights were established to preserve the highway infrastructure. Past research has shown that overweight operations, while causing significant damage to roads and bridges, can enhance the trucking industry productivity, and thus yield economic benefits both regionally and nationally. In the United States, individual states administer oversize and overweight vehicle permit programs to regulate and collect revenues from overweight operations. Differences in the truck size and weight limits and overweight permit programs across the states inhibit seamless and efficient truck travel across the country. Agencies responsible for maintaining the highway infrastructure realize that the cost of consumption of the infrastructure far exceeds the collected revenues. The current study examines four options to improve overweight vehicle permitting systems: multiobjective optimization of traditional mechanisms, incentives for infrastructure-friendly vehicles, application of an auction-based quota for overweight vehicle operations, and opportunities for harmonizing the regulations covering overweight vehicle operations that differ across the states. The first three options are qualitatively and quantitatively applied to a case study involving Indiana\u27s newly-established overweight commodity permits for vehicles carrying metal (up to 120,000 lbs), and agricultural (up to 97,000 lbs) goods. An incremental approach to harmonization of truck size and weight regulations and overweight vehicle permitting systems is qualitatively described, including available tools and data needs to promote harmonization. The four options are not mutually exclusive; collectively, they provide opportunities for transportation decision makers to improve overweight vehicle permitting. Each option contributes to the ongoing discussion about how to address the issue of uncompensated consumption of highway infrastructure assets attributable to overweight vehicles. The multiobjective optimization formulated herein better reflects actual decisions made by both the agency and carriers than limited previous quantitative research. The quantification of willingness to pay for investment informs state agencies about the extent to which incentives for infrastructure-friendly vehicles can be adopted. The quota framework contained herein is an extension of strategies used previously to mitigate demand into a tool for controlling the amount of allowable infrastructure damage while collecting necessary revenues to protect infrastructure from undue damage. Finally, the harmonization of overweight vehicle permitting programs can streamline interstate overweight operations for both state agencies and carriers. The combination of several options can result in greater improvements to both the trucking industry\u27s productivity and the preservation of highway infrastructure than any option alone

A Heckit Model of Sales Dynamics in Turkish Art Auctions: 2005-2008

Unsold artworks are excluded from a traditional hedonic price index as no observable price can be attached to them. The question is whether the exclusion of unsold artworks lead to a sample selection bias in the traditionally constructed art price indices. In this paper, we examine the art auction sales performance in Turkey for the period between January 2005 and February 2008 using a unique database which contains 11,212 sales records including unsold items. We employ the two-stage Heckit model. Our empirical model combines demand-side influences with supply-side characteristics as well as the auction microstructure. We find that there is no sample selection bias created by unsold works. This finding also provides an explanation for why the attempts in the literature to identify which works are (not) sold turned out to be largely unsuccessful. On the behavioural side, we confirm the existence of the âafternoon effectâ in both sales rates and in sales prices in Turkish art auctions. There is also some evidence for the âdeath effectâ and âmaster effectâ in both sales rates and sales prices. Finally, we find that the returns in the Turkish art market serve as a hedge against inflation in our sample perio