This dissertation is about an open question of cartel ratifiable conditions. My research goal is to establish a mechanism which is able to detect and explain cartels' activities. My research question in the second chapter is whether or not an efficient cartel mechanism is ratifiable in the first-price sealed-bid auction format with participation costs. R. McAfee and J. McMillan study the coordinated bidding strategies in a strong cartel, which is incentive-compatible and efficient. This chapter investigates this efficient collusive mechanism with two important conditions (1) bidders can update their information through a cartel's prior auction and (2) they have to pay participation costs to participate in seller's auction. The concept of ratifiability, introduced by P. Cramton and T. Palfrey, is applied to explore the first-price sealedbid auction with participation costs. I discovered that the efficient cartel mechanism, such as pre-auction knockout, would be ratified when either of the two conditions exists. However, this mechanism is no longer ratifiable when both conditions exist. The bidder with the highest value in the cartel would have incentive to betray, since doing so sends a credible signal of high value. Hence, the other bidders will be discouraged from participating in the seller's auction and the highest-value bidder maximizes his revenue. In the third chapter, I studied the seller's strategy when she faces a cartel in an auction mechanism. An active seller's optimal strategy is to raise the reserve price to a level that is higher than her own valuation. The collusive mechanism is sustainable even though its revenue is extracted by the higher reserve price. If the seller is authorized to change the auction mechanism, she can receive the expected payoff, prevent the formation of a ring and keep the auction efficient. Further, I presented two methods that could deter a cartel under specific conditions. One is the residual claimants method as proposed by Y. Che and J. Kim and the other is to set a positive participation cost as outlined in the first chapter. The residual claimants method can inhibit a ring in many cases, but it may have some trouble in preventing an efficient cartel mechanism when there is only one participant in the seller's auction. In the fourth chapter, I investigated how to achieve external efficiency in a repeated game. In particular, I looked into the allocation of the budgeted that allows an authority, such as the government, to differentiate collusive behavior and to expose agents to external threats. A threshold level of the budget payment is found in an incentive compatible collusive mechanism for which the government can prevent an agent from participating. In a two-stage model, I showed that if the government can boost exemption or have more budget to subsidize agents, it is less likely that a ring will be formed.

In this dissertation, I develop a framework to investigate the implications of Affirmative Action in college admissions on both study effort choice and college placement outcomes for high school students. I model the college admissions process as a Bayesian game where heterogeneous students compete for seats at colleges and universities of varying prestige. There is an allocation mechanism which maps each student's achieved test score into a seat at some college. A colorblind mechanism ignores race, while Affirmative Action mechanisms may give preferential treatment to minorities in a variety of ways. The particular form of the mechanism determines how students' study effort is linked with their payoff, playing a key roll in shaping behavior. I use the model to evaluate the ability of a given college admission policy to promote academic achievement and to minimize racial academic gaps--namely, the achievement gap and the college enrollment gap. On the basis of these criteria, I derive a qualitative comparison of three canonical classes of college admissions policies: color-blind admissions, quotas, and admission preferences. I also perform an empirical policy analysis of Affirmative Action (AA) in US college admissions, using data from 1996 on American colleges, freshman admissions, and entrance test scores to measure actual AA practices in the American college market. Minority college applicants in the United States effectively benefit from a 9% inflation of their SAT scores, as well as a small fixed bonus of approximately 34 SAT points. I also estimate distributions over student heterogeneity and perform a series of counterfactual policy experiments. This procedure shows that AA practices in the US significantly improve college placement outcomes for minorities, at the cost of discouraging achievement by the most and least talented students. The analysis also indicates ways in which AA could be re-designed in order to better achieve its objectives. As it turns out, a quota system produces a substantial improvement relative to either the current system or a color-blind system. However, quotas are illegal in the US and cannot be implemented as such. Nevertheless, I propose a variation on the AA policy already in place that is outcome-equivalent to a quota.

En esta tesis se analizan tres mecanismos de subasta distintos, todos ellos bajo el supuesto de valoraciones privadas e independientes.El primer mecanismo que analizamos es una subasta de múltiples unidades en la que los objetos son vendidos secuencialmente por medio de subastas de precio descendente. La característica que hace a esta subasta diferente de la "estándar", analizada por Weber (1983) es que después de la venta del primer objeto el precio no vuelve a subir, sino que los objetos que quedan son ofrecidos al resto de los compradores al mismo precio. Si los objetos no se venden a ese precio, la subasta continúa dejando que el precio siga descendiendo. Esta subasta se analiza en dos contextos: con un modelo de valoraciones continuas y con uno de valoraciones discretas. Se demuestra que si existe un equilibrio simétrico con pujas monótonas, el resultado de la subasta es ineficiente con probabilidad positiva. Aplicando el teorema de equivalencia de rentas se concluye que la subasta no maximiza los beneficios esperados del vendedor. Para poder comparar los precios medios y las varianzas analizamos un modelo de valoraciones discretas. Demostramos que los precios esperados son menores en nuestra subasta y que también lo es la varianza de los beneficios del vendedor. Damos un ejemplo de una familia de funciones de utilidad von Neumann- Morgenstern tal que la utilidad esperada del vendedor es mayor en una u otra de las subasta dependiendo de los valores del parámetro a.El segundo mecanismo que analizamos es una subasta asimétrica de primer precio donde la valoración de uno de los postores es conocida. Demostramos que no existe ningún equilibrio en estrategias puras y caracterizamos un equilibrio en estrategias mixtas en el que el postor cuya valoración es conocida randomiza su puja, mientras que los demás postores juegan una estrategia pura (y monótona). El resultado de la subasta es ineficiente con probabilidad positiva y el beneficio esperado del postor cuya valoración es conocida es menor que en una subasta estándar. Sin embargo, no es obvio que los demás postores mejoren su situación: el hecho de que uno de los postores juegue una estrategia mixta tiene el mismo efecto en sus rivales que un precio de reserva aleatorio. Esto puede obligarles a pujar más agresivamente de lo que pujarían en una subasta normal. El efecto en los beneficios del vendedor también es ambiguo. Tomando un ejemplo con la función de distribución uniforme y comparando los beneficios esperados del vendedor y de los compradores en las dos subastas, obtenemos que, en nuestro ejemplo (con 2 y con 3 postores) los beneficios esperados del vendedor son mas altos en la subasta asimétrica que en la normal.Para terminar, hacemos un repaso de la literatura en subastas secuenciales cuando los compradores desean más de una unidad del bien que se subasta, y analizamos una subasta secuencial de primer precio con y sin opción de compra. Para ello usamos el mismo modelo que Black y de Meza (1992) usan para analizar la subasta secuencial de segundo precio. Demostramos que cuando las preferencias son unidimensionales no existe ningún equilibrio monótono y simétrico, lo cual implica que el resultado de la subasta no puede ser eficiente. Cuando se introduce una opción de compra que permita comprar la segunda unidad al mismo precio al que se adquirió la primera, existe un equilibrio en estrategias puras para algunos valores de los parámetros del modelo. En este caso la opción siempre se ejerce, lo cual lleva a una asignación de los bienes diferente que la que resulta en la subasta secuencial de segundo precio. Cuando la valoración por la segunda unidad es aleatoria, las subastas de primer y segundo precio sin opción de compra son equivalentes. Por último, exponemos las dificultades de caracterizar un equilibrio cuando cuando se introduce la opción de compra en este modelo. / In this thesis we analyze three different auction mechanisms, all of them under the private and independent valuations assumption. The first auction we analyze is a multi-unit auction where the objects are sold sequentially by descending-price auctions. The feature that makes this auction different from the "standard" one is that after one object has been sold, the price does not return to a high level, but the remaining objects are offered to the rest of the bidders at the same price. If the objects fail to be sold at that price, the auction is resumed letting the price descend again. We analyze this auction in two different contexts: a continuous valuation model, and a discrete valuation one. We show that if a symmetric, monotone bidding functions equilibrium exists, the outcome of the auction is inefficient with positive probability. Applying the revenue equivalence theorem we conclude that the auction cannot maximize the seller's expected revenue. In order to be able to compare the averages expected prices and variances, we analyze a discrete-valuation model. We show that the average expected prices are lower in our auction, and that so is the variance of the seller's expected revenue. We give an example of a family of von Neumann-Morgenstern utility functions under which the seller's expected utility may be higher in each of the auctions depending on the value of a parameter a.The second mechanism we analyze is an asymmetric first-price auction where the valuation of one of the bidders is common knowledge. We show that no pure strategy equilibrium exists and we characterize a mixed strategy equilibrium in which the bidder whose valuation is common knowledge randomizes his bid while the other bidders play a (monotone) pure strategy. The outcome of the auction is inefficient with positive probability, and the expected profit of the bidder whose valuation is common knowledge is lower than in a standard auction in which her valuation is private knowledge. However, it is not obvious that the other bidders are better off: the fact that one of the bidders plays a mixed strategy has the effect of on the other bidders as a random reserve price bidder. This may force all them to bid more aggressively than they would in the standard auction. The effect on the seller's expected revenue is also ambiguous. In an example with the uniform distribution, we compare the expected profits of seller and buyers in this auction with those in a standard symmetric private valuation model. In our example, with 2 and 3 bidders, the seller's expected revenue is higher in the asymmetric auction than in a standard auction.To finish, we survey the literature on sequential auctions with multi-unit demand, and we analyze a sequential first-price auction with and without a buyer's option. To do it we use the same model that Black and de Meza (1992) used to analyze the secuencial second-price caution. We show that when the preferences are unidimensional, no monotone symmetric pure strategy equilibrium exists, which implies that the outcome of the auction cannot be efficient. When an option to buy the second unit at the price paid for first one is introduced, there exists a pure strategy equilibrium for some values of the parameters of the model. In this case the option is always exercised, leading to a different allocation than that of the sequential second-price auction. When the valuations for the second unit is stochastic, the first-price and second-price auctions without a buyer's option are efficient and revenue equivalent. To finish, we give some insights into the difficulties of solving for an equilibrium when the buyer's option is introduced in this model.

<p>\abstract</p><p>{\em Mechanism design} studies optimization problems taking into accounts of the selfish agents. {\em Network externality} is the effect a consumer receives from other consumers of the same good. This effect can be negative or positive. We first consider several mechanism design problems under the network externality assumption. The externality model used in this dissertation is more general than the widely used cardinality based model. In particular the network we consider in this dissertation is a graph, which is not necessarily complete. Our goal is to design {\em truthful} mechanisms to maximize the seller's revenue. Our main results under the network externality utility model are several optimal or near optimal mechanisms for {\em digital goods auctions}. To do so we invent several novel approximation schemes as well as applying results from the {\em approximation algorithm} literature. In particular when the agents exhibit negative network externality, we first model the problem as a two staged {\em pricing game}. We then show that the pricing game is an exact {\em potential game} which always admits a pure {\em Nash Equilibrium}. We then study the {\em best} and {\em worst} Nash Equilibrium in this game in terms of the revenue. We show two positive results. For the best Nash Equilibrium we show a $2$-approximation to the maximum revenue on bipartite graphs. For the worst Nash Equilibrium we use the notion of a {\em $\delta$-relaxed} equilibrium. In the sense that the prices for the same type of agents are within $\delta$ factor of each other. We accompany our positive results with matching hardness results. On the other hand, when the agents exhibit positive network externality, we take the {\em Myersonian} approach. We first give a complete characterization for all the truthful mechanisms. Using this characterization we present a truthful mechanism which achieves the optimal expected revenue among all the truthful mechanisms when the prior distributions of the agents are {\em independent} and {\em regular}. We also show near optimal mechanisms when the prior distributions are possibly {\em correlated}. </p><p>{\em Prior-free} auctions can approximate meaningful benchmarks for</p><p>non-identical bidders only when sufficient qualitative information</p><p>about the bidder asymmetry is publicly known.</p><p>We consider digital goods auctions where there is a {\em</p><p>total ordering} of the bidders that is known to the seller,</p><p>where earlier bidders are in some sense thought to have higher</p><p>valuations. </p><p>We define</p><p>an appropriate revenue benchmark: the maximum revenue that can be</p><p>obtained from a bid vector using prices that are nonincreasing in the</p><p>bidder ordering and bounded above by the second-highest bid. </p><p>This {\em monotone-price benchmark} is always as large as the well-known</p><p>fixed-price benchmark, so designing prior-free auctions with</p><p>good approximation guarantees is only harder. </p><p>By design, an auction that approximates the monotone-price benchmark</p><p>satisfies a very strong guarantee: it is, in particular, simultaneously</p><p>near-optimal for </p><p>essentially every {\em Bayesian} environment in which bidders'</p><p>valuation distributions have nonincreasing monopoly prices, or in</p><p>which the distribution of each bidder stochastically dominates that</p><p>of the next. Even when there is no distribution over bidders'</p><p>valuations, such an auction still provides a quantifiable</p><p>input-by-input performance guarantee. We design a simple $O(1)$-competitive prior-free</p><p>auction for digital goods with ordered bidders.</p> / Dissertation

This paper explores the determinants of the number of bidders and final price of 1900s oil paintings auctioned by resellers or dealers on eBay art auctions. We find that starting price has negative effect on bidder’s decision whether to enter the auctions or not while seller reputation variables such as seller´s feedback, being top rate seller has a positive effect. Furthermore, auction theory is introduced to study the bidder´s behavior through auction characteristics and final price. We find that, interestingly, the seller´s reputation variables have no significant effect to the final price and the number of bidders has positive effect toward final price of art work. This evidence means that art auctions on eBay has a private value auctions characteristic. However, some specific characteristics of online auctions, which are the last minute bidding and the presence of experienced bidders, significantly affect the final price. Being an experienced winner or using last minute bidding as a strategy substantially pay more than inexperienced winners or winners who do not use last minute bidding in auctioned painting. This could result from different preference of bidders toward auctioned painting or information on which each bidder is holding.

MBA Professional Report / Aproved for public release; distribution is unlimited. / In light of the limited recognition of electronic reverse auctions (e-RA) in the acquisition field, the purpose of this research paper is to further the use of e-RAs throughout the federal government and the Department of Defense (D0D). By exploring a multitude of auction types and designs that have been or are currently being used in the private sector, these practices set a basis for researching the auction types being used in the public sector. This paper further explores the regulations guiding the use of e-RAs and investigates the federal government's application of reverse auctions through studies, reports, and interviews with users of e-RAs. Details as to what attributes are prevalent in these e-RAs, what features are best suited for e-RAs, and what benefits have been derived from the use of e-RAs in the federal government are also included. Finally, the researchers found that e-RAs have increased transparency, cost savings, and efficiencies in the acquisition process. Although reverse auctions are being used effectively, the researchers found that there are still opportunities for improvement including incorporating a fully functional best-value tool into e-RA technology and developing more thorough federal guidance on e-RAs as an alternative pricing method.

Submitted by Roberta Ferriche (rferriche@deloitte.com) on 2009-06-30T16:33:35Z No. of bitstreams: 1 Roberta Ferriche - Dissertação.pdf: 248461 bytes, checksum: 0381197ebe8ffd098154f7bd8811794f (MD5) / Approved for entry into archive by Vitor Souza(vitor.souza@fgv.br) on 2009-06-30T19:58:14Z (GMT) No. of bitstreams: 1 Roberta Ferriche - Dissertação.pdf: 248461 bytes, checksum: 0381197ebe8ffd098154f7bd8811794f (MD5) / Made available in DSpace on 2009-06-30T19:59:33Z (GMT). No. of bitstreams: 1 Roberta Ferriche - Dissertação.pdf: 248461 bytes, checksum: 0381197ebe8ffd098154f7bd8811794f (MD5) / The reform process that the petroleum industry have undergone from the 90 ́s, associated to the transference of public utility services to the private sector, brought important changes to the economy. In this context, the intensified use of auctions, for the privatization of public companies and for the concession of exploration rights assumed a role of great relevance in the Brazilian economy. The discussion on the type of auction used for the sale of oil leases is of great importance, since it represents the beginning of this new policy. Being so, this paper aims at approaching the main aspects that base the choice of an appropriate format of auction, detailing the peculiarities of the oil industry and, finally, analyzing the achieved results. / O processo de reforma que ocorreu na indústria petrolífera a partir da década de 1990, associada à transferência de serviços de utilidade pública para o setor privado, trouxe mudanças importantes para a economia. Neste contexto, a intensificação do uso de leilões, para a privatização das empresas públicas e para a concessão de direitos de exploração de seus serviços assumiu um papel de grande relevância na economia brasileira. A discussão sobre o desenho de leilão adotado para a venda de blocos petrolíferos é fundamental, pois representa o ponto inicial desta nova política. Sendo assim, este trabalho aborda os principais aspectos que fundamentam a escolha de um formato apropriado de leilão, detalhando as peculiaridades da indústria petrolífera e, finalmente, discutindo os resultados obtidos.

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In this dissertation auction formats are developed and discussed that focus on three specific economic environments. Regarding the impossibility results from mechanism design, the main task for the implementation of auction designs is to balance allocative efficiency and incentive compatibility – the main characteristics a mechanism should provide. Therefore, the dissertation investigates the limits of conceivable relaxations of allocative efficiency and incentive compatibility for complex settings such as double auctions, interdependent-valuation environments and electricity market designs. The overall aim is to carefully weigh up the advantages and disadvantages for either relaxing allocative efficiency or respectively incentive compatibility.

World financial and economic crisis encouraged government institutions to find ways for more efficient organization of public procurement. Therefore there is growing interest in public procurement centralization process. In the dissertation there are analyzed economic, management and law aspects of public procurement centralization. The aim of the dissertation is to create a model for evaluating state’s financial benefits from centralization of public procurement and to evaluate these benefits in the case of Lithuania. By generalizing scientific literature there are abstracted elements influencing formation of financial benefits from centralization of public procurement, also there are advantages and disadvantages of public procurement centralization being analyzed. By synthesizing scientific knowledge of purchasing management and auction theory, few hypotheses are raised to explain differences in prices between centralized and decentralized public procurement. Empirical research of public procurement centralization was conducted and based on research results evaluation of Lithuanian state financial benefits from public procurement centralization was carried out. Also causes of price differences between centralized and decentralized public procurement were defined. Generalization of research results enabled to do prediction of development for public procurement centralization. / Pasaulyje 2008 metais kilusi finansinė ir ekonominė krizė paskatino valdžios institucijas ieškoti būdų, kaip efektyviau naudoti valstybės biudžeto lėšas, skirtas viešiesiems pirkimams. Todėl susidomėjimas viešųjų pirkimų centralizavimu pastaruoju metu labai padidėjo. Disertacijoje nagrinėjami ekonominiai, vadybiniai ir teisiniai viešųjų pirkimų centralizavimo aspektai. Pagrindinis darbo tikslas – sukurti viešųjų pirkimų centralizavimo finansinės naudos vertinimo modelį ir remiantis šiuo modeliu atlikti šios naudos vertinimo tyrimą viešųjų pirkimų centralizavimo Lietuvoje atveju. Disertacijoje, apibendrinus mokslinę literatūrą, išskiriami veiksniai, lemiantys viešųjų pirkimų centralizavimo finansinę naudą, taip pat analizuojami pirkimų centralizavimo pranašumai ir trūkumai. Sintetinant pirkimų valdymo dalyko ir aukcionų teorijos žinias, iškeliamos hipotezės paaiškinančios skirtumus tarp kainų centralizuotuose ir decentralizuotuose viešuosiuose pirkimuose. Darbe atlikti keli empiriniai viešųjų pirkimų centralizavimo tyrimai, kurių pagrindu įvertinta viešųjų pirkimų centralizavimo Lietuvoje finansinė nauda. Taip pat nustatytos kainų skirtumo centralizuotuose ir decentralizuotuose viešuosiuose pirkimuose susidarymo priežastys. Apibendrinti tyrimų rezultatai leido pateikti viešųjų pirkimų centralizavimo plėtros prognozę.