How Auctioneers Set Ex-Ante and Ex-Post Reserve Prices in English Auctions

We compare two commonly used procurement English auction formats - the ex-ante reserve price and the ex-post reserve price, with symmetric and independently distributed private costs. Both formats are indirect implementations of Myerson's optimal mechanism. Both formats yield the same ex post payoffs when auctioneers optimally choose reserve prices. However, the optimal reserve prices follow two counter-intuitive prescriptions: optimal ex-ante reserve prices do not vary with the number of bidders, and optimal ex-post reserve prices are invariant to the realized auction prices. Anticipated regret, Davis et al (2011), and subjective posterior probability judgement, Shachat and Tan (2015), are two different approaches to rationalize observed auctioneers' choices that violate the two counter-intuitive prescriptions respectively. We generalized the latter model to one of Subjective Conditional Probabilities (SCP) which predicts optimal ex-ante reserve prices decreasing in the number of bidders and also predicts optimal ex-post reserve prices increasing in the realized auction prices. In our first experiment, in which costs follow a uniform distribution, we find two possible explanations to the experimental results. First, the auctioneers use the SCP model for both formats. Second, they use format-specific models. In our second experiment with a left-skewed cost distribution, we finally find that the SCP provides a unified behavioral model of how auctioneer set reserve prices in the two formats

An experimental investigation of auctions and bargaining in procurement

In reverse auctions, buyers often retain the right to bargain further concessions from the winner. The optimal form of such procurement is an English auction followed by an auctioneer's option to engage in ultimatum bargaining with the winner. We study behavior and performance in this procurement format using a laboratory experiment. Sellers closely follow the equilibrium strategy of exiting the auction at their costs and then accepting strictly profitable offers. Buyers generally exercise their option to bargain according to their equilibrium strategy, but their take-it-or-leave-it offers vary positively with auction prices when they should be invariant. We explain this deviation by modeling buyers' subjective posteriors regarding the winners' costs as distortions, calculated using a formulation of probability weighting, of the Bayesian posteriors. We show alternative models based upon risk aversion and anticipated regret can't explain these price dependencies

How Auctioneers Set Ex-Ante and Ex-Post Reserve Prices in English Auctions

We compare two commonly used procurement English auction formats - the ex-ante reserve price and the ex-post reserve price, with symmetric and independently distributed private costs. Both formats are indirect implementations of Myerson's optimal mechanism. Both formats yield the same ex post payoffs when auctioneers optimally choose reserve prices. However, the optimal reserve prices follow two counter-intuitive prescriptions: optimal ex-ante reserve prices do not vary with the number of bidders, and optimal ex-post reserve prices are invariant to the realized auction prices. Anticipated regret, Davis et al (2011), and subjective posterior probability judgement, Shachat and Tan (2015), are two different approaches to rationalize observed auctioneers' choices that violate the two counter-intuitive prescriptions respectively. We generalized the latter model to one of Subjective Conditional Probabilities (SCP) which predicts optimal ex-ante reserve prices decreasing in the number of bidders and also predicts optimal ex-post reserve prices increasing in the realized auction prices. In our first experiment, in which costs follow a uniform distribution, we find two possible explanations to the experimental results. First, the auctioneers use the SCP model for both formats. Second, they use format-specific models. In our second experiment with a left-skewed cost distribution, we finally find that the SCP provides a unified behavioral model of how auctioneer set reserve prices in the two formats

An experimental investigation of auctions and bargaining in procurement

In reverse auctions, buyers often retain the right to bargain further concessions from the winner. The optimal form of such procurement is an English auction followed by an auctioneer's option to engage in ultimatum bargaining with the winner. We study behavior and performance in this procurement format using a laboratory experiment. Sellers closely follow the equilibrium strategy of exiting the auction at their costs and then accepting strictly profitable offers. Buyers generally exercise their option to bargain according to their equilibrium strategy, but their take-it-or-leave-it offers vary positively with auction prices when they should be invariant. We explain this deviation by modeling buyers' subjective posteriors regarding the winners' costs as distortions, calculated using a formulation of probability weighting, of the Bayesian posteriors. We show alternative models based upon risk aversion and anticipated regret can't explain these price dependencies

Robust Optimization using a new Volume-Based Clustering approach

We propose a new data-driven technique for constructing uncertainty sets for robust optimization problems. The technique captures the underlying structure of sparse data through volume-based clustering, resulting in less conservative solutions than most commonly used robust optimization approaches. This can aid management in making informed decisions under uncertainty, allowing a better understanding of the potential outcomes and risks associated with possible decisions. The paper demonstrates how clustering can be performed using any desired geometry and provides a mathematical optimization formulation for generating clusters and constructing the uncertainty set. In order to find an efficient solution to the problem, we explore different approaches since the method may be computationally expensive. This contribution to the field provides a novel data-driven approach to uncertainty set construction for robust optimization that can be applied to real-world scenarios

Amorphous 1-D nanowires of calcium phosphate/pyrophosphate : A demonstration of oriented self-growth of amorphous minerals

Amorphous inorganic solids are traditionally isotropic, thus, it is believed that they only grow in a non-preferential way without the assistance of regulators, leading to the morphologies of nanospheres or irregular aggregates of nanoparticles. However, in the presence of (ortho)phosphate (Pi) and pyrophosphate ions (PPi) which have synergistic roles in biomineralization, the highly elongated amorphous nanowires (denoted ACPPNs) form in a regulator-free aqueous solution (without templates, additives, organics, etc). Based on thorough characterization and tracking of the formation process (e.g., Cryo-TEM, spherical aberration correction high resolution TEM, solid state NMR, high energy resolution monochromated STEM-EELS), the microstructure and its preferential growth behavior are elucidated. In ACPPNs, amorphous calcium orthophosphate and amorphous calcium pyrophosphate are distributed at separated but close sites. The ACPPNs grow via either the preferential attachment of ∼2 nm nanoclusters in a 1-dimension way, or the transformation of bigger nanoparticles, indicating an inherent driving force-governed process. We propose that the anisotropy of ACPPNs microstructure, which is corroborated experimentally, causes their oriented growth. This study proves that, unlike the conventional view, amorphous minerals can form via oriented growth without external regulation, demonstrating a novel insight into the structures and growth behaviors of amorphous minerals

Plant 45S rDNA Clusters Are Fragile Sites and Their Instability Is Associated with Epigenetic Alterations

Our previous study demonstrated that 45S ribosomal DNA (45S rDNA) clusters were chromosome fragile sites expressed spontaneously in Lolium. In this study, fragile phenotypes of 45S rDNA were observed under aphidicolin (APH) incubation in several plant species. Further actinomycin D (ActD) treatment showed that transcriptional stress might interfere with chromatin packaging, resulting in 45S rDNA fragile expression. These data identified 45S rDNA sites as replication-dependent as well as transcription-dependent fragile sites in plants. In the presence of ActD, a dramatic switch to an open chromatin conformation and accumulated incomplete 5′ end of the external transcribed spacer (5′ETS) transcripts were observed, accompanied by decreased DNA methylation, decreased levels of histone H3, and increased histone acetylation and levels of H3K4me2, suggesting that these epigenetic alterations are associated with failure of 45S rDNA condensation. Furthermore, the finding that γ-H2AX was accumulated at 45S rDNA sites following ActD treatment suggested that the DNA damage signaling pathway was associated with the appearance of 45S rDNA fragile phenotypes. Our data provide a link between 45S rDNA transcription and chromatin-packaging defects and open the door for further identifying the molecular mechanism involved