In most electricity markets, producers submit supply functions to a procurement uniform-price auction under uncertainty before demand has been realized. In the Supply Function Equilibrium (SFE), every producer commits to the supply function that maximises his expected profit given the bids of competitors. The presence of multiple equilibria is a basic weakness of the SFE framework. Essay I shows that with (i) symmetric producers, (ii) perfectly inelastic demand, (iii) a reservation price (price cap), and (iv) capacity constraints that bind with a positive probability, a unique symmetric SFE exists. The equilibrium price reaches the price cap exactly when capacity constraints bind. Another weakness is difficulty finding a valid asymmetric SFE with non-decreasing supply functions. Essay II shows that for firms with asymmetric capacity constraints but identical constant marginal costs there exists a unique and valid SFE. Equilibrium supply functions exhibit kinks as well as vertical and horizontal segments. The price at which the capacity constraint of a firm binds is increasing in the firm’s share of market capacity. The capacity constraint of the second largest firm binds when the market price reaches the price cap. Thereafter, the largest firm supplies its remaining capacity with a perfectly elastic segment at the price cap. Essay III presents a numerical algorithm that calculates a similar SFE for asymmetric firms with increasing marginal costs. Essay IV derives the SFE of a pay-as-bid auction such as the balancing market for electric power in Britain. A unique SFE always exists if the demand’s hazard rate is monotonically decreasing, as for a Pareto distribution of the second kind. Assuming this probability distribution, the pay-as-bid procurement auction is compared to the SFE of a uniform-price procurement auction. Two theorems in Essay V prove that the demand-weighted average price is (weakly) lower in the pay-as-bid procurement auction.

The IT age is marked by innovative approaches to the online commerce. Technology as the core of innovation has undergone numerous evolutions through the “creative destruction." Motivated by the phenomena and the challenges in the technology-driven markets, I explore the economic role of innovation from different angles in the following essays. Chapter 1 focuses on firms’ competitive strategies while constructing novel business models in delivering online services. In particular, I am interested in their bundling of marketing services with the core business. In a game theoretic model, I derive competing firms' equilibrium strategies with choices between three business models, no ad-support, ad-support with the optional advertising strategy, and the mandatory advertising strategy, and find that competitive business models can be differentiation-driven or advertising driven depending on market ad aversion. Interestingly, mandatory advertising weakly dominates optional advertising under certain market conditions. My findings offer new insights to the bundling literature. Chapter 2 examines the performance-based auction model in the iconic online advertising innovation, keyword auctions. I analyze advertisers' decision of utilizing their existing reputation from a primary auction upon entering a new auction. The short-term and long-term setups are modeled for analyzing seasonal marketing in a new auction and branding a new product, in examining the impact of new market size, performance, and risk on advertisers' decisions. While an optimistic new market encourages reputation stretching, in the long-term setup it further depends on the performance difference between the two markets. A higher risk is found to induce stretching under intensive competition for both cases; in the long-term, stretching decision is determined by the market size. Chapter 3 examines the connection between business cycles and innovation and offers insights for regulatory innovation policies. Combining endogenous market structure with the dynamic game framework, I study the Markov perfect equilibrium where heterogeneous firms choose their innovation rates. I find that increased per-capita income tends to improve aggregate innovation, while income inequality shocks may reduce innovation conditional on the market structure. I also find subsidies to dampen innovation incentives, and policies such as tax credits that reduce the variable R&D costs to have positive effects on innovation. / text

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Doctor of Philosophy / Department of Agricultural Economics / John A. (Sean) Fox / The 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.

The aim of this thesis is an analysis of market conditions, the possibility of development of company, determination of a business plan, companies' liability for the content of their Web sites and specify contract terms among the users of the new online auction exchange The Biggest Clearance (hereafter TBC), owned by company LIQUIDATE MATE LTD.

[pt] Esse artigo investiga o fenômeno de Overbidding em Leilões de Primeiro preço com valorações privadas e independentes. O presente estudo considera a possibilidade de que a percepção equivocada da probabilidade de se vencer o leilão e sua derivada em relação ao lance sejam causas relevantes para esse fenômeno. Além disso, busca-se investigar os fatores que causam essa má percepção. Foi realizado um experimento como forma de identificar a relevância desses fatores para o entendimento completo do fenômeno de Overbidding. Os resultados experimentais confirmam a existência desse viés, além de indicar o erro de previsão da chance de se vencer o leilão como uma causa importante para a ocorrência do mesmo, apesar de esse não explicar totalmente a diferença entre o ótimo teórico e os lances efetuados pelos indivíduos. Por outro lado, há indícios de que a má percepção da variação da probabilidade de se ganhar o leilão não esteja correlacionada com o fenômeno em estudo. / [en] This paper investigates the Overbidding phenomenon in first-price independent private values auctions. Experiments were conducted to investigate the hypothesis that overbidding may be driven by misperception about either the probability of winning the auction or the derivative of this probability. This paper also investigates possible causes of this misperception. The experimental outcomes confirm the presence of the overbidding phenomenon and indicate that the forecasting error of the chance of winning the auction is an important factor, although it can not fully account for the observed bias. The results also indicate that misperception of probabilities’s derivatives is not correlated with overbidding.

Thesis title:Special modes of contracting by entrepreneurs This paper deals with the specific ways of closing a contract regulated by the Civil Code, such as auction, public tender and public offer. However, before proceeding to the very subject of this work, it is necessary, at least in the essential features to say, what is a contract and what is the typical way of closing a contract, when it is afterwards discussed what is the special ways of closing a contract. The first chapter deals with the concept of a contract and a typical way of closing it. The second chapter summarizes how to deviate from a typical way of concluding contracts and what arrangements are then used for this procedure. Since this work is aimed at entrepreneurs, so it deals with the specific ways of closing a contract particularly from their point of view. Therefore the paper firstly defines who is an entrepreneur according to the Civil Code and how the rules for contracting are different in regard to entrepreneurs. Although it is not a way of concluding a contract, at the end of the second chapter, a brief description of the public promise is provided, so that it can be judged which legal action results in the conclusion of a contract and which is a public promise and creates an obligation to provide performance without...

O objetivo do presente estudo é identificar as possíveis dimensões que formam a atitude do internauta em relação aos sites de leilão on-line, por meio da aplicação de um instrumento de coleta de dados e posterior avaliação da atitude global. Inicialmente são apresentados os conceitos referentes a atitude sobre uma perspectiva histórica e, os modelos estruturais mais conhecidos e as formas mais utilizadas para se avaliar as atitudes. São apresentados também os conceitos referentes ao comércio eletrônico com foco no modelo de leilões on-line. É desenvolvida uma escala para se medir atitudes, com base tanto na literatura encontrada como por meio de entrevistas com usuários do site. Para se analisar e validar a escala, é feita uma pesquisa exploratória com mais de quinhentos internautas onde por meio do uso de análise fatorial, chega-se a um modelo onde à atitude global foi avaliada. / The aim of this research paper is to identify the dimension of internauts? attitudes towards online auctions? websites through a questionnaire application for data collecting and posterior evaluation of global attitude. This paper presents at first some attitude concepts from a historical perspective, the most known structural models and the most used ways for attitude evaluating. Some concepts about eletronic commerce, focusing on online actions are also discussed. Then a scale was developed based on the literature review and in interviews made with the website?s users, in order to measure attitudes. With the purpose of analyzing and validating the scale an exploratory research was done with more than five hundred internauts and using factorial analysis a model where the global attitude was evaluated has been constructed.

A falta de qualidade das obras públicas no Brasil povoa os noticiários diários. Os exemplos são abundantes, atribuídos a contratos mal elaborados, falhas graves nos projetos ou mesmo à ausência desses, licitações frustradas, obras interrompidas e superfaturadas, desvios de recursos e corrupção. Tentar compreender melhor essa situação é a motivação desta dissertação, que discorre sobre a contratação pública de projetos de edificações e, para isso, estuda o projeto e sua encomenda. A licitação é um procedimento obrigatório para a celebração de qualquer contrato público. Entre outros requisitos, a lei de licitações exige que a proposta seja a “mais vantajosa” para a administração, algo que tem levado à adoção indiscriminada do critério do “menor preço”, sendo incoerente com a doutrina jurídica e contrariando as pesquisas científicas, que consideram o projeto relevante para a qualidade final da obra. O problema de pesquisa questiona exatamente por que a Administração Pública tem contratado por menor preço um serviço que deveria ser contratado por critérios técnicos e de qualidade? O objetivo da dissertação é propor uma explicação para essa situação a partir de revisão bibliográfica, análise da legislação, realização de pesquisa documental com editais de licitação, aplicação de questionários de opinião com arquitetos e outros atores, além de entrevista direta com o autor da lei de licitações. Finalmente, o trabalho comprova a relevância do projeto, mas também desvenda sua irrelevância identificando que o menor preço não é o único problema e, mesmo que “todos” afirmem ser contra o menor preço, o povo segue pagando caro por projetos baratos. / The qualityless of public works in Brazil is currently in the daily news. Examples of it are plentiful, attributed to poorly drafted contracts, serious failures or even absence of projects, frustrated bids, discontinued and overpriced works, waste of resources and corruption. The motivation of this dissertation is trying to better understand this situation, which focuses on the public contracting of building projects and, for this, studies the project itself and its order. Bidding is a mandatory procedure for obtaining any public contract. Among other requirements, the bidding law requires that the proposal be the "most advantageous" for the administration, which ledded to the indiscriminate adoption of the "lowest price" criteria, incoerent with the juridical doctrine and opposite to scientific research, which consider the project relevant to the final quality of the building work. The research problem questions why the Public Administration has contracted for a lower price a service that should be contracted by technical and quality criteria? The objective of the dissertation is to propose an explanation for this situation from a bibliographical review, an analysis of the legislation, a documental research on bid’s documents, an opinion questionaries applying to architects and other actors, as well as direct interview with the author of the bidding law. Finally, the research proves the relevance of the project, but also reveals its irrelevance by identifying that the lowest price is not the only problem, and even if "everyone" claims to be against the lowest price, people continue to pay expensive for cheap projects.

Most financial markets operate as double auction markets in which buyers and sellers submit limit and market orders. In this case the traders have to decide firstly whether they want to submit a buy or sell order and then secondly what the limit price of this order is. In this thesis I develop further a theoretical model based on Chatterjee and Samuelson (1983) in which two traders trade with each other in a double auction market. Assuming that both traders assign a private value to the asset they are trading, which is known only to them but not their trading partner, I determine whether the traders should submit a buy or sell order and what the optimal limit price should be. I develop a single-period model in which traders only trade once and thus cannot learn each other’s private values from trading as well as a multi-period model that allows to infer to some degree the other trader’s private value from their order submission behavior. Using this theoretical model as a benchmark, I then conducted experiments with students to evaluate whether the actual behavior of students fits the theory developed. Although we find that in general the behavior of traders is consistent with the proposed theory, there are some significant differences. Most notably traders seem to underreact to differences in their own private value, i.e. do not adjust their limit price to the extend suggested by theory. I evaluate these outcomes in light of results established results in behavioral finance.