The theory of auction has become an active research area spanning multiple disciplines such as economics, finance, marketing and management science. But a close examination of it reveals that most of the existing studies deal with ascending (i.e., English) auctions in which it is assumed that the bid increments are continuous. There is a clear lack of research on optimal descending (i.e., Dutch) auction design with discrete bid levels. This dissertation aims to fill this void by considering single-unit, open-bid, first price Dutch auctions in which the bid levels are restricted to a finite set of values, the number of bidders may be certain or uncertain, and a secret reserve price may be present or absent. These types of auctions are most attractive for selling products that are perishable (e.g., flowers) or whose value decreases with time (e.g., air flight seats and concert tickets) (Carare and Rothkopf, 2005). I began by conducting a comprehensive survey of the current literature to identify the key dimensions of an auction model. I then zeroed in on the particular combination of parameters that characterize the Dutch auctions of interest. As a significant departure from the traditional methods employed by applied economists and game theorists, a novel approach is taken by formulating the auctioning problem as a constrained mathematical program and applying standard nonlinear optimization techniques to solve it. In each of the basic Dutch auction model and its two extensions, interesting properties possessed by the optimal bid levels and the auctioneer's maximum expected revenue are uncovered. Numerical examples are provided to illustrate the major propositions where appropriate. The superiority of the optimal strategy recommended in this study over two commonly-used heuristic procedures for setting bid levels is also demonstrated both theoretically and empirically. Finally, economic as well as managerial implications of the findings reported in this dissertation research are discussed.

Chapter 2 compares government consultation via an opinion poll and a citizens' jury". In a jury, about fiffteen volunteers spend several days learning about a policy choice before voting. If the public is ill-informed, the government trades-off "information" against participation". Jurors have better information than poll respondents, but constitute a smaller sample. More- over, participation costs may bias the jury sample. Indeed, the literature suggests that costs might induce "neutrality": over-representation of the minority to the extent that the result is uninformative. I show that although the minority will often be over-represented, "neutrality" is a knife-edge result here so juries may be worthwhile. Extensions consider compensating jurors and excluding "special interests". Chapter 3 uses evidence from the allocation of regeneration funding to motivate a model in which central government may ask councils to compile apparently pointless dossiers to ap- ply for money, because the dossiers provide information about councils' competence. I then consider when the government might prefer a simpler but less flexible auction-type process. The UK government's ability to "ring-fence" money, obliging councils to spend it on its priority, is central to chapter 3. Chapter 4 develops the analysis of auctions in this context. With variations in competence, ring-fencing effectively imposes type-specific minimum bids. I characterise equilibrium bidding and show that the ring-fencing constraint may not only increase bids, but actually induce councils to contribute resources. Continuing the themes of participation and competence in the policy process, chapter 5 examines parish councils' use of a general spending power. I find parishes with more well-educated and older citizens (groups with generally higher political participation) are more likely to use their powers. Further investigation suggests that these citizens matter because they are involved in governance, rather than because they exert democratic pressure. This has impli- cations for wider neighbourhood governance policy.

This thesis focuses on finding Bayesian equilibria for sellers in virtual auctions using real currencies. Existing literature for real-world auctions is examined from the perspective of economic theory, game theory, and pricing strategies. Next, computer science theory is reviewed to identify applications of real-world auction models in video games. Finally, the video game Diablo 3, the first to have a real currency auction house for virtual goods, will be examined as a case study. This thesis contributes to the known literature by analyzing the Diablo 3 real currency auction house and identifying seller strategies to be applied in future virtual auction houses and economies using real currencies. JEL Classification C73, D44, D58 Keywords repeated games, auctions, general equilibrium Author's e-mail waheedbrown@hotmail.com Supervisor's e-mail gregor@fsv.cuni.cz Abstrakt Tato práce se zameruje na hledání Bayesovské rovnováhy pro prodejce ve virtuálních aukcích, které používají skutecné peníze. Na úvod se prozkoumá existující literatura o aukcích z hlediska ekonomické teorie, teorie her tvorby a cenové strategie. Dále budou analyzovány príspevky z informatiky, které povedou k zjištení zpusobu aplikace aukcních modelu ve videohrách. Hlavním príspevkem bude analýza video...

The aim of this dissertation is to develop a suitable bidding strategy for an internet bidding agent that allows the agent to obtain the lowest possible price for a desired product at an internet auction. The bidding strategy is obtained under the constraint of limited information available about the strategies of the opponents. The agent will operate in an internet auction environment. Therefore classic auction theory is researched and explained. Auctions are widely used to bring buyers and sellers of products together and to create a market to buy and sell goods. The buyer wants to pay the lowest possible price and the seller wants to receive the highest possible price. However, the seller has no influence on the final selling price of the product. Instead the price is determined by the buyers. The agent will place bids on the auction site on behalf of the human instructor. The bidding agent will make use of the theory behind auctions to influence the other bidders on the auction to make the lowest possible bids. The model suggested in this dissertation, the regressive bidding agent model (RBA model), will incorporate auction theory to create a suitable agent. The agent will predict the future bids of opponents on the auction, basing its predictions on a regressive function. The agent will base its own bids placed at the auction on the bidding time remaining at the auction together with the bids placed by other bidders on the auction. / Prof. E.M. Ehlers

Cette thèse en microéconomie appliquée se compose de trois chapitres, chacun abordant une question différente. Le premier chapitre, « La distribution séquentielle en présence de fraude », montre comment les entreprises peuvent exploiter le moment de la diffusion des contenus afin d’atténuer les effets de la fraude numérique, dans un monde où un certain piratage est inévitable. À travers un modèle, cet article fournit une explication claire de la façon dont une firme peut faire obstacle à la fraude à travers un changement de la distribution séquentielle du produit. En l’absence de fraude, les profits des entreprises sont indépendants de la manière dont le contenu est mis en vente. Cependant, lorsque la fraude représente une menace réelle, l’entreprise peut en atténuer les effets en choisissant de manière stratégique la part du produit qui est offert à chaque période. Cela permet de changer la valeur du produit pour les consommateurs et de rendre la fraude moins attractive de ce point de vue. L’entreprise en situation de monopole bénéficie de la libération de contenu en deux périodes différentes d’une manière asymétrique qui trouvent des analogies dans des exemples réels tels que le marché des outils logiciels spécialisés ou des émissions de télévision. Le deuxième chapitre, « L’offre complice dans les enchères à valeur commune », présent les effets d’un type d’enchère frauduleuse appelée « enchère complice ». Cette fraude consiste à placer des enchères anonymes sur ordre du vendeur en vue de faire monter artificiellement le prix de l’objet vendu. Nous concevons un modèle simple pour comprendre les incitations du vendeur à enchérir de manière complice dans une enchère anglaise à valeur commune, dans laquelle l’information privée des participants suit une distribution discrète. Nous montrons comment le caractère discret de la distribution affecte le profit espéré du fait d’enchérir de manière complice pour le vendeur ex-ante. Nous montrons aussi comment le vendeur révise ses enchères complices à partir de l’information qu’il reçoit à mesure que l’enchère se déroule. Nous trouvons que si le nombre de signaux est faible, le vendeur peut gagner à ne pas participer, même lorsque les autres participants sont myopes. Par ailleurs, et quel que soit le nombre de signaux dans l’enchère, si le nombre de participants est assez élevé, le fait d’avoir la possibilité de mettre en œuvre une enchère complice a toujours pour effet de détériorer le profit espéré du vendeur. Le troisième chapitre, « Le confort des médecins et le choix des césariennes », est co-écrit avec Shagun Khare et Alan Acosta. Cet article analyse les causes qui pourraient expliquer le taux élevé de césarienne à Buenos Aires, en Argentine, qui excède largement la recommandation de l’Organisation mondiale de la Santé (OMS). L’hypothèse d’une demande induite par le fournisseur, qui prévoit plus de césariennes que nécessaire du point de vue médical, pourrait expliquer cet écart. Dans cet article co-écrit avec Shagun Khare et Alan Acosta, nous étudions un aspect des incitations des médecins à stimuler la demande : le confort. A partir d’une enquête menée auprès de femmes enceintes à Buenos Aires, nous regardons si les chances qu’une femme fasse l’objet d’une césarienne dépend du moment de l’accouchement, en particulier s’il s’agit d’un jour travaillé ou non. En laissant de côté les césariennes planifiées, nous trouvons que le confort compte, mais seulement dans les hôpitaux privés. Nous trouvons aussi qu’une femme qui déclare préférer une césarienne à une naissance naturelle a de plus grandes chances de recourir à une césarienne dans les hôpitaux privés. Nos résultats montrent aussi que l’environnement institutionnel joue un rôle déterminant sur la manière dont le confort des médecins et les préférences des mères influencent ces choix. / This thesis in applied microeconomics is composed of three chapters, each one addressing a different question. The first chapter, “Sequential distribution in the presence of Piracy”, shows how firms can exploit the timing of the release of digital content as a way to mitigate the effects of piracy, in a world where some piracy is unavoidable. We develop an analytical model where a monopolist produces a particular good, and it can choose the time at which its product is available to consumers. On top of deciding on prices, the monopolist also chooses the share of the product it releases at each period. In the absence of piracy, firm’s profits are independent of the way in which content is released. However, when piracy is a real threat, the firm can soften its effect by strategically selecting the share of the product offered in each period, changing consumers’ valuation and making piracy less attractive from their perspective. The monopolist benefits from releasing content in two different periods in an asymmetric way which find analogies in real life examples such as the market of specialised software tools or of TV shows. The second chapter, “Shill bidding in common value auctions”, presents the effects of a particular cheating environment in common value auctions. Shill bidding consists of placing anonymous bids on the seller’s behalf to artificially drive up the prices of the auctioned item. We build a simple model to understand the incentives a seller has to shill bid in an English common value auction where the bidders’ private information is drawn from a discrete distribution. We show how the discreteness affects the seller’s ex-ante expected gain of shill bidding, and we also show how the seller updates his shill bid based on the new information he receives as the auction goes on. We find that if the number of signals is low, the seller might be better off refraining from participating even when bidders are fully myopic. Moreover, for any number of signals in the auction, if the number of participants is sufficiently high, the shill bidding strategy always deteriorates the seller’s expected profits. The third chapter, “Physician convenience and cesarean section delivery”, is co-authored with Shagun Khare and Alan Acosta. This paper analyses the causes that might explain the high rate of cesarean section in Buenos Aires, Argentina, that far exceeds the World Health Organization recommendation. The supplier-induced demand hypothesis, which predicts more c-section deliveries than otherwise medically needed, might be the reason for this disparity. In this paper, using a survey of pregnant women in Buenos Aires, we study one aspect of the physician’s incentives to induce demand: convenience. We look at whether a woman’s chance of getting a c-section depends on the period of delivery, i.e. whether it is a working day or not. Setting aside scheduled c-sections, we find that convenience matters, but only in private hospitals. We also find that women who state that they prefer c-sections over natural births have a higher chance of having a c-section in private hospitals. While physicians’ convenience and mothers’ preferences do matter, our research finds that the institutional environment plays a defining role in how much these matters.

Os leilões na Internet têm ganhado muita popularidade, tornando-se uma das mais bem sucedidas formas de comércio eletrônico na atualidade. Apresento um modelo teórico para descrever um leilão ascendente, semelhante ao que ocorre na eBay, e verifico suas previsões comportamentais através de dois experimentos. Os resultados mostraram um distanciamento grande entre as previsões teóricas e o que foi observado na prática, no que se refere às estratégias utilizadas, mas acredito que isso se deva à falta de experiência dos participantes dos experimentos. Desenvolvo, então, programas que automatizam a coleta de dados de leilões de selos na eBay e analiso as variáveis que influenciam preços, número de compradores e lances iniciais (preços mínimos). Não houve surpresas em tal análise, no sentido de observar-se resultados contra-intuitivos, mas destaco a reputação dos vendedores como fator relevante para a determinação de preços finais e número de compradores participantes. Além disso, também destaco a ocorrência da submissão tardia de lances, fenômeno recorrente nos leilões na Internet. Proponho, por fim, um método simples que busca determinar o tipo de modelo de leilão, se de valor comum ou de valor privado, e aplico o método nos dados obtidos dos leilões de selos. O resultado foi o de que os leilões analisados estão enquadrados no modelo de valor comum. / Online auctions are one of the most popular and successful types of electronic commerce nowadays. I present a theoretical framework to address the kind of ascending auction implemented at eBay, and I check its predictions through two experiments. The results of the experiments did not confirm the theory, but I believe this is due to the bidders’ lack of previous experience. I also present an algorithm that automatically gathers data from auctions of stamps at eBay. These data is then used on an exploratory analysis that tries to shed some light on the determinants of final prices, minimum bids and the number of bidders. There were no surprises in this analysis, but I would highlight the measurable effect that seller’s reputation has on final prices and the number of bidders. Furthermore, it was possible to observe the occurrence of late bidding. At last, I propose a simple method that determines to which paradigm the on-line auction of stamps at eBay belongs: private value or common value. The result was that the auction of stamps at eBay belongs to the common value paradigm.

Thesis advisor: Hideo Konishi / Online auctions have many different formats. Each of these affect the ways in which users bid strategically. One example of this is the end-time format. Some sites, like eBay, use a hard close, under which there is a strict end-time and the highest bidder at that time wins. Others, like Amazon, have an extended end-time format. It has been shown that these differences do, in fact, appear to change how bidders behave. This paper uses data obtained from Yahoo! Auctions, where both formats are used, to examine the impact these differences have on the final price of an auction. / Thesis (BA) — Boston College, 2005. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics Honors Program.

Esta dissertação tem como objetivo estimar a renda de informação apropriada pelos vencedores dos leilões para exploração e produção de petróleo e gás natural no Brasil. Assume-se um modelo estrutural de leilão de valor privado independente. Foram estimadas as distribuições dos lances e dos valores privados dos lançadores de forma não-paramétrica, assumindo assimetria entre os participantes (Petrobras+OGX versus outros). Para isso, explorou-se um banco de dados construído a partir de informações de todos os leilões realizados entre 1999 e 2008. Tal estudo é relevante por tentar avaliar o sucesso do governo brasileiro e das empresas licitantes nestes leilões, principalmente diante da discussão do novo marco regulatório do pré-sal. Os resultados sugerem que a Petrobras e a OGX obtiveram rendas de informação significativamente maiores que as demais concorrentes. Tais rendas variam entre 14% e 63%, dependendo do número de competidores e de seu tipo. De maneira geral, o governo tende a extrair maior parte do preço de reserva do vencedor do leilão quando este não é a Petrobras ou a OGX e quanto maior for o número de concorrentes. / This dissertation aims to estimate the information rent grabbed by the winners of auctions for exploration and production of oil and natural gas in Brazil. It assumes a structural model of independent private values for the auctions. We estimated non-parametrically both the distributions of bids and the distribution of private values from bidders, assuming asymmetry between the participants (Petrobras + OGX versus others). For this, we explored a database with information about all the auctions held between 1999 and 2008. This study is relevant since it tries to assess the success of the Brazilian government and bidders in these auctions, especially before the discussion on the new regulatory framework of pre-salt. Results suggest that Petrobras and OGX obtained information rents significantly higher than other competitors. These rents vary between 14% and 63%, depending on the number of competitors and on their types. In general, the government tends to capture most of the reserve price of the winning bidder when it is not Petrobras or OGX and the greater the number of competitors.

Em meio a centenas de sítios de leilões na Internet, observa-se que alguns oferecem serviços de agentes para procurar, monitorar e/ou oferecer lances nos leilões. A maior parte dos sistemas baseados em agentes não oferece apoio ao acompanhamento e à submissão de lances em vários leilões simultâneos. Estas atividades são especialmente importantes, pois o fato de participar simultaneamente em vários leilões eleva a probabilidade de conseguir melhores resultados econômicos, devido à possibilidade de encontrar mercados mais vantajosos. Contudo, à medida que cresce o número de leilões simultâneos, torna-se inviável para um ser humano monitorá-los e oferecer lances. Neste contexto, o uso de agentes pode ser extremamente interessante. Neste trabalho, propõe-se uma infra-estrutura para facilitar a construção de agentes arrematantes para operarem no eMediator (Sandholm, 2000) em múltiplos leilões. Com tal infra-estrutura computacional batizada de sistema AAS (Auction Agent System), a implementação de novas estratégias em agentes arrematantes será facilitada. Desta forma, este trabalho contribui para o avanço na pesquisa de novas estratégias de atuação de agentes arrematantes para o caso de múltiplos leilões simultâneos. / Among hundred of auction sites in the internet, some of them offer services powered by software agents that search auctions, monitor them and/or submit bids in these auctions. However, most of these systems are concerned about just one auction, instead of acting in multiple simultaneous auctions. The possibility of acting in multiple auctions is very important, because it makes possible to get better economical results. But if the number of auctions grows very much, it can become very hard (or even impossible) to a human being to monitor and bid in these auctions. That can make the use of software agents very useful. We propose a infrastructure that makes easier the construction of bidder agents that works with eMediator (Sandholm, 2000) system and new bidding strategies. We call this infrastructure AAS (Auction Agent System). This system adds value to researchers of multiple simultaneous auctions bidding strategies.

Em meio a centenas de sítios de leilões na Internet, observa-se que alguns oferecem serviços de agentes para procurar, monitorar e/ou oferecer lances nos leilões. A maior parte dos sistemas baseados em agentes não oferece apoio ao acompanhamento e à submissão de lances em vários leilões simultâneos. Estas atividades são especialmente importantes, pois o fato de participar simultaneamente em vários leilões eleva a probabilidade de conseguir melhores resultados econômicos, devido à possibilidade de encontrar mercados mais vantajosos. Contudo, à medida que cresce o número de leilões simultâneos, torna-se inviável para um ser humano monitorá-los e oferecer lances. Neste contexto, o uso de agentes pode ser extremamente interessante. Neste trabalho, propõe-se uma infra-estrutura para facilitar a construção de agentes arrematantes para operarem no eMediator (Sandholm, 2000) em múltiplos leilões. Com tal infra-estrutura computacional batizada de sistema AAS (Auction Agent System), a implementação de novas estratégias em agentes arrematantes será facilitada. Desta forma, este trabalho contribui para o avanço na pesquisa de novas estratégias de atuação de agentes arrematantes para o caso de múltiplos leilões simultâneos. / Among hundred of auction sites in the internet, some of them offer services powered by software agents that search auctions, monitor them and/or submit bids in these auctions. However, most of these systems are concerned about just one auction, instead of acting in multiple simultaneous auctions. The possibility of acting in multiple auctions is very important, because it makes possible to get better economical results. But if the number of auctions grows very much, it can become very hard (or even impossible) to a human being to monitor and bid in these auctions. That can make the use of software agents very useful. We propose a infrastructure that makes easier the construction of bidder agents that works with eMediator (Sandholm, 2000) system and new bidding strategies. We call this infrastructure AAS (Auction Agent System). This system adds value to researchers of multiple simultaneous auctions bidding strategies.