Competition and Cooperation in Divisible Good Auctions: An Experimental Examination

An experimental approach is used to examine the performance of three different multi-unit auction designs: discriminatory, uniform-price with fixed supply, and uniform-price with endogenous supply. We find that the strategies of the individual bidders and the aggregate demand curves are inconsistent with theoretically identified equilibrium strategies. The discriminatory auction is found to be more susceptible to collusion than are the uniform-price auctions, and so contrary to theoretical predictions and previous experimental results the discriminatory auction provides the lowest average revenue. Consistent with theoretical predictions, bidder demands are more elastic with reducible supply or discriminatory pricing than in the uniform-price auction with fixed supply. Despite a lack of a priori differences across bidders, the discriminatory auction results in significantly more symmetric allocations.

Competition and Cooperation in Divisible Good Auctions: An Experimental Examination

An experimental approach is used to examine the performance of three different multi-unit auction designs: discriminatory, uniform-price with fixed supply, and uniform-price with endogenous supply. We find that the strategies of the individual bidders and the aggregate demand curves are inconsistent with theoretically identified equilibrium strategies. The discriminatory auction is found to be more susceptible to collusion than are the uniform-price auctions, and so contrary to theoretical predictions and previous experimental results, the discriminatory auction provides the lowest average revenue. Consistent with theoretical predictions, bidder demands are more elastic with reducible supply or discriminatory pricing than in the uniform-price auction with fixed supply. Despite a lack of a priori differences across bidders, the discriminatory auction results in significantly more symmetric allocations.Divisible good, Auctions, Experimental economics

Psychotherapy Versus Pharmacotherapy For Posttraumatic Stress Disorder: Systemic Review And Meta-Analyses To Determine First-Line Treatments

Background: Current clinical practice guidelines (CPGs) for posttraumatic stress disorder (PTSD) offer contradictory recommendations regarding use of medications or psychotherapy as first-line treatment. Direct head-to-head comparisons are lacking. Methods: Systemic review of Medline, EMBASE, PILOTS, Cochrane Central Register of Controlled Trials, PsycINFO, and Global Health Library was conducted without language restrictions. Randomized clinical trials \u3e8 weeks in duration using structured clinical interview-based outcome measures, active-control conditions (e.g. supportive psychotherapy), and intent-to-treat analysis were selected for analyses. Independent review, data abstraction, and bias assessment were performed using standardized processes. Study outcomes were grouped around conventional follow-up time periods (3, 6, and 9 months). Combined effect sizes were computed using meta-analyses for medication versus control, medication pre-/posttreatment, psychotherapy versus control, and psychotherapy pre-/posttreatment. Results: Effect sizes for trauma-focused psychotherapies (TFPs) versus active control conditions were greater than medications versus placebo and other psychotherapies versus active controls. TFPs resulted in greater sustained benefit over time than medications. Sertraline, venlafaxine, and nefazodone outperformed other medications, although potential for methodological biases were high. Improvement following paroxetine and fluoxetine treatment was small. Venlafaxine and stress inoculation training (SIT) demonstrated large initial effects that decreased over time. Bupropion, citalopram, divalproex, mirtazapine, tiagabine, and topiramate failed to differentiate from placebo. Aripiprazole, divalproex, guanfacine, and olanzapine failed to differentiate from placebo when combined with an antidepressant. Conclusions: Study findings support use of TFPs over nontrauma-focused psychotherapy or medication as first-line interventions. Second-line interventions include SIT, and potentially sertraline or venlafaxine, rather than entire classes of medication, such as SSRIs. Future revisions of CPGs should prioritize studies that utilize active controls over waitlist or treatment-as-usual conditions. Direct head-to-head trials of TFPs versus sertraline or venlafaxine are needed

Call and Continuous Trading Mechanisms under Asymmetric Information: An Experimental Investigation.

The author examines the relative performance of call and continuous auctions under asymmetric information by manipulating trading rules and information sets in laboratory asset markets. He finds significant differences in an environment that extends the A. S. Kyle (1985) framework to permit the exogenous liquidity trading motive to have a natural economic interpretation. The adverse selection costs incurred by noise traders are significantly lower under the call auction, despite no significant reduction in average price efficiency. This result suggests that discussions of the costs and benefits of insider trading should take place within the context of a specific trading mechanism. Copyright 1996 by American Finance Association.

Capacity Constraints And The Winner\u27S Curse In Multi-Unit Common Value Auctions

We explore the role of capacity constraints in establishing efficient pricing in multi-unit common value auctions in a setting relevant to auction-based equity IPOs. The method of inquiry is experimental economics. We find that sufficiently large capacity constraints mitigate the overbidding that plagues single-unit auctions and is one of the most robust laboratory findings. We also uncover a puzzling propensity for most bidders to place a portion of their bids at prices above their signals. This disequilibrium behavior persists with experience and in cases with substantial losses in previous auctions. Our results suggest caution is warranted in promoting auction based IPOs that allow unrestricted access by the non-professional investing public. © 2013 The Board of Trustees of the University of Illinois

Microstructure With Multiple Assets: An Experimental Investigation Into Direct And Indirect Dealer Competition

This paper uses the economic laboratory to isolate the effects of direct and indirect competition on dealer profitability. We compare these two settings: (1) three competing dealers in a single asset (direct competition) with (2) three assets with a monopoly dealer in each (indirect competition). We find that: bid-ask spreads are wider, prices are less responsive to order flow (so there is less price discovery), and per-trade dealer profits are larger in the single-asset setting. Important economic differences between these two settings include a heightened adverse selection problem in the three-asset setting and a public good nature of price discovery in the one-asset setting. © 2003 Elsevier B.V. All rights reserved

When It's Not the Only Game in Town: The Effect of Bilateral Search on the Quality of a Dealer Market.

The authors report results from experimental asset markets with liquidity traders and an insider where they allow bilateral trade to take place, in addition to public trade with dealers. In the absence of the search alternative, dealer profits are large--unlike in models with risk-neutral, competitive dealers. However, when the authors allow traders to participate in the search market, dealer profits are close to zero. Dealers compete more aggressively with the alternative trading avenue than with each other. There is no evidence that price discovery is less efficient when the specialists are not the only game in town. Copyright 1997 by American Finance Association.

Competition And Cooperation In Divisible Good Auctions: An Experimental Examination

An experimental approach is used to examine the performance of three different multiunit auction designs: discriminatory, uniform-price with fixed supply, and uniform-price with endogenous supply. We find the actual strategies to be inconsistent with theoretically identified equilibrium strategies. The discriminatory auction is found to be more susceptible to collusion than either uniform-price auction and so, contrary to theoretical predictions and previous experimental results, it generates the lowest average revenue. Consistent with theoretical predictions, the actual bid schedules are more elastic with reducible supply or discriminatory pricing than in the uniform-price auction with fixed supply

When Less (Potential Demand) Is More (Revenue): Asymmetric Bidding Capacities In Divisible Good Auctions

We show that asymmetry in bidders\u27 capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit auctions in which the final value of the good is common knowledge. This effect appears to be related to the increased difficulty of coordination when there are significant differences between bidders. Due to its impact on collusive outcomes, asymmetry in bidding capacities has a more powerful impact on the seller\u27s revenue than does the auction type. Consistent with the finding in Sade et al. (2006) that the discriminatory auction is more susceptible to collusion than the uniform-price auction, asymmetry in capacity constraints has a greater impact in discriminatory auctions. © Springer Science+Business Media, LLC 2006