The main objective of this study is to examine the behavior of sellers in a sealed offer market in three distinct environments. The dissertation examines the mechanism to determine its competitive characteristics when sellers are unable to engage in overt communication. Next, the market setting is changed in order to consider the ability of sellers to form stable and effective cartels when the subjects are given the opportunity to conspire. Finally, the consequences of antitrust enforcement is considered. First, by reducing the number of communication episodes between sellers and second, by separately introducing random monetary penalties whenever the observed winning offer was greater than sellers cost. A secondary but significant contribution of this research was the use of prison inmates as subjects in economic experiments. Therefore, the financially motivated behavior of student subjects could be contrasted with prisoner subjects in a laboratory environment. This contrast proves extremely interesting when an antitrust environment, using randomly imposed monetary penalties, was introduced. The results of my research indicate, given equal constant cost suppliers, the sealed offer auction mechanism has the potential to generate very competitive behavior by sellers when communication between subjects is prohibited. However, in an identical environment, when conspiratorial opportunities exist prior to every auction, one observes very stable and effective cartels. These first two conclusions are insensitive to the subject pool under consideration (i.e., student versus prisoner subjects). When the frequency of communication is reduced (i.e., as a result of antitrust enforcement) the market is still conducive to effective collusion. However, in comparison to the experiments where subjects were allowed to communicate prior to every auction, the cartel in this environment were more unstable and less effective at extracting monopoly profit from the market. Finally, when antitrust enforcement is introduced by imposing random monetary penalties whenever the observed winning offer is greater than seller cost, the behavior of sellers is extremely sensitive to the expected returns from collusion as well as the dispersion of these returns. Also, the cartels collusive behavior indicated that students were risk averse, responded more to changes in the severity of the penalty specification (the penalty amount) while the prisoner cartels were risk takers, being more sensitive to changes in the certainty of the penalty specification (the detection level).

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A significant number of positions in the Norwegian Armed Forces that are open for assignment are not filled because they do not receive any qualified applicants. Over the last five years, over 30 percent of the announced job vacancies have been unfilled. This thesis explores two different areas of research to help remedy this / auction theory and assignment market mechanisms. Auction and assignment market theory and practice are examined to reveal how these mechanisms might provide incentives and improve the quality of military assignments. This research finds that both of these mechanisms fall short when used independently. Auction theory is problematic when both sides of the market have preferences over the outcome / assignment models are problematic when there are system level concerns about which jobs remain unfilled. This thesis introduces a hybrid solution, containing elements of both auction theory and assignment markets, which has the potential to improve the current matching process. This research improves our knowledge and understanding about both of these research areas, and their interactions.

The sale of text advertisements on search engines using an auction format called Generalized Second Price (GSP) has become increasingly common. GSP is unique in that it allows bidders to revise their bid if they are unhappy with the result of the auction, and because the auction sells multiple units of a related good simultaneously. We model this sale as a hierarchical game with complete information, allowing one potential bidder to bid in each stage. The hierarchical game has an entirely different set of equilibria from the simultaneous bid game studied in earlier research on this auction. Under hierarchical bidding, Vickrey-Clarke-Groves guarantees higher auctioneer revenue than any equilibrium in GSP.

Online bidding is gradually becoming a popular shopping behavior among modern consumers. The combination of traditional auctions and Web technology has drawn substantial research interest. Bidder behavior in online auctions, including online bidding strategies, has been a focus of scholars. Previous studies have discovered and described different bidding strategies in online auctions. However, there is a dearth of research that examines the determinants of bidding strategies using theoretical frameworks and multiple data types. Hence, online bidding behavior requires further investigation. / This study aims to fill the research gap by systematically exploring the factors that influence bidding strategies. It summarizes previous literature on bidding strategies and proposes an integrated model derived from behavioral decision theories, motivational theories, and literature on online auctions. The proposed determinants of bidding strategies and their effects are validated empirically using both subjective and objective data. Results confirm the validity of the proposed integrated model. Three bidding strategies-ratchet bidding, agent bidding, and snipe bidding-are identified in online single-unit auctions. These strategies are influenced by determinants such as starting price, bid increment, perceived utility, network effect, bidding agent effectiveness, bidding experience, risk preference, time availability, and utilitarian motivation. / Cui, Xiling. / Advisers: Xiande Zhao; Siu King Vincent Lai. / Source: Dissertation Abstracts International, Volume: 73-03, Section: A, page: . / Thesis (Ph.D.)--Chinese University of Hong Kong, 2010. / Includes bibliographical references (leaves 131-140). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese; appenidx B in Chinese.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2003. / Includes bibliographical references (leaves 95-97). / At Internet auction sites like eBay, similar goods are often sold in a sequence of auctions. Buyers can therefore benefit from forward-looking bidding strategies that take into account the available information about future auctions. This dissertation develops a model of such bidding, provides both experimental and econometric evidence of the model's relevance to behavior, and explores the impact of forward-looking bidding on the seller's optimal selling strategy as well as on the overall market equilibrium. Extending prior sequential-auction theories, the proposed model assumes that bidders know their private valuations of objects auctioned in the near future. Rational bidders "bargain-hunt" in that they bid less than they would otherwise, and early bids decrease with the private values of later objects. The model's predictions are tested in two laboratory experiments, both involving a sequence of two auctions. Both experiments show that first-auction bids decrease with the private values of the future object, but the second experiment suggests that the average decrease is smaller than predicted by the theory. An econometric analysis of eBay data finds that buyers seem to look ahead, and on average adjust their bids down as a function of their private preferences for the objects sold in the near future. They also bid less when the same item they are bidding on is available within the next few auctions. To explore the supply-side of a sequential auction marketplace, the dissertation analyzes a model of a long-lived monopolist facing overlapping generations of forward-looking buyers. When the seller learns about the current auction-market demand from past prices, bargain-hunting poses not only the obvious cost of a lower average revenue, but it also provides a benefit to the seller by making prices more informative. / (cont.) In equilibrium, the seller limits the extent of bargain-hunting by threatening to withhold future supply, but the threat is only credible when the profitability of the auction-market is close to the seller's outside option. Therefore, bargain-hunting can coexist with strategic selling, but is shown to be a self-regulating phenomenon that diminishes when the existence of the auction-market is threatened by an outside spot-market. / by Robert Zeithammer. / Ph.D.

Orientador: Edméa Cássia Baptista / Co-orientador: Leonardo Nepomuceno / Banca: Edilaine Martins Soler / Banca: Guilherme Guimarães Lage / Resumo: Os modelos de leilão tradicionalmente utilizados em mercados de energia de sistemas hidrotérmicos consistem em modelos monoperíodo. Estes modelos não consideram em sua formulação a representação detalhada das restrições associadas ao sistema de geração de termoelétrica e à rede de transmissão, bem como a coordenação com o médio prazo para a geração hidroelétrica. A representação destas características é entãof feita através de ajustes posteriores, ex. post, a fim de garantir que os limites técnico-operacionais dos sistemas de geração e transmissão sejam respeitados. Tais ajustes geram ineficiências econômicas e subsídios cruzados. Assim, o objetivo deste trabalho é propor um modelo de leilão multiperíodo com representação da transmissão para sistemas hidrotérmicos. Este modelo, além de incorporar em sua formulação a representação precisa das restrições intertemporais e da transmissão, também considera a coordenação das gerações hidro e termoelétricas com o médio prazo, a fim de assegurar a menor complementação termoelétrica no presente e no futuro. Três abordagens de coordenação entre o curto e o médio prazo são apresentadas: coordenação primal, dual e primal-dual. Para a validadção do modelo de leilão proposto neste trabalho, testes computacionais foram realizados com o sistema 24 barras IEEE RTS-1996 para um caso base, o qual desconsidera a coordenação entre o curto e o médio prazo, e, posteriormente, para os casos que incluem a coordenação com o médio prazo / Abstract: The auction models traditionally used in energy markets for hydrothermal systems consist in single-period models. he formulation of these models usually does not represent the thermal constraints and network constraints, and it also does not consider the coordination between short and medium-term for hydrothermal generation. The representation of these features is made by ex post adjustments in order to ensure that the technical and operational limits of the generation and transmission systems are guaranteed. Such adjustments generate economic inefficiencies and cross-subsidies. The goal of this work is to propose a multiperiod auction for hydrothermal systems. This model incorporates the accurate representation of inter-temporal constraints and network constraints, and it also considers the coordination between short and medium-term schedulings in order to ensure the lower thermal complementation in the present and in the future. Three coordinating approaches between the short and medium term schedulings are presented: primal, dual and primal-dual coordination. For the validation of the auction model proposed in this work, computational tests are carried out with the IEEE 24 bus RTS-1996 system, for a base case, which does not consider the cordination between short and medium-term schedulings, and later for the cases that include the coordination in the medium-term scheduling / Mestre

Doctor of Philosophy (Economics) / Auctions are an ancient economic institution. Since Vickrey (1961), the development of auction theory has lead to an extremely detailed description of the often desirable characteristics of these simple selling procedures, in the process explaining their enduring popularity. Given the pervasiveness of auctions, the question of how a seller should engineer the rules of these mechanisms to maximize her own profits is a central issue in the organization of markets. The seminal paper of Myerson (1981) shows that when facing buyers with Independent Private Values (IPVs) a standard auction with a specifically selected reserve price (or prices) is optimal, that is, maximizes a seller's expected profits among all conceivable selling mechanisms. In this model, it is assumed that the buyers have perfect information as to the existence of gains from trade. We shall argue that the consequences of this assumption for the design of the optimal auction are not well understood, which motivates our analysis. The three essays of this thesis relax the `known seller valuation' assumption by examining the optimal auction program when the seller (and principal) holds private information representing her reservation value for the good. In the first essay we provide an original technique for comparing ex ante expected profits across mechanisms for a seller facing N>1 potential buyers when all traders hold private information. Our technique addresses mechanisms that cannot be ranked point-by-point through their allocation rules using the Revenue Equivalence Theorem. We find conditions such that the seller's expected profits increase in the slope of each buyer's allocation probability function. This provides new intuition for the fact that a principal does not benefit from holding private information under risk neutrality. Monopoly pricing induces steep probability functions so the seller/principal benefits from announcing a fixed price, and implicitly her private information. An application is presented for the well known k double auction of the bilateral trade literature. In the second and third essays of this thesis, we extend the above framework to allow for informational externalities. Specifically, we allow for the situation in which the seller's private information represents a common value component in buyers' valuations. Thus the seller's private information (say regarding the quality of the good) is of interest to bidders independently of any strategic effects. In recent work Cai, Riley and Ye (2007) have demonstrated that a seller who holds private information about the quality of a good faces an extra consideration in designing an auction; the reserve price signals information to bidders. In a separating equilibrium signalling is costly in the sense that reserves are higher than would be optimal under complete information. We examine the returns to the seller in an English auction from using different types of secret reserve regimes. We find that immediate disclosure of a reserve is preferable to announcement after the auction in the form of a take-it-or-leave-it offer to the winning bidder. Sale occurs less often during the auction for a given reserve price strategy under secret reserve regimes, which increases the incentive for the seller to report more favourable information though the reserve price offer. Separating equilibria involving later announcement therefore generate even lower expected profits to the seller (signalling is more costly) than under immediate disclosure. In the third essay we compare the benchmark signalling equilibrium of immediate disclosure to a screening regime which we call the Right of Refusal. In this extreme form of a secret reserve the seller never announces the reserve price, she simply accepts or rejects the auction price. We find that the Right of Refusal dominates immediate disclosure if the seller's valuation is a sufficient statistic for the private information of interest. Thus a seller with market-relevant private preference information can benefit from not exercising monopoly price setting power. The result also provides conditions under which a competitive screening equilibrium is more efficient than a signalling mechanism. Broadly speaking, screening is better when the common value aspect in the preferences of the informed and uninformed parties are `aligned', and potential gains from trade to the uninformed party are significant. We believe this conclusion to be of particular interest to the design of privatization schemes.

Thesis (Ph. D.)--Ohio State University, 2006. / Title from first page of PDF file. Includes bibliographical references (p. 59-62).

Aparte del primer capítulo que es la introducción, la tesis consiste de tres ensayos. En el segundo capítulo estoy analizando el problema de implementación en el mercado de bienes indivisibles. El modelo trata de asignar un conjunto de bienes indivisibles a los agentes donde cada agente tiene que pagar el precio por el bien que reciba y la suma de los precios tiene que ser igual a un valor determinado. Un ejemplo estándar es el problema de inquilinos donde ha de determinar quien recibe que habitación y que precio tiene que pagar dado que la suma de los precios de las habitaciones que los inquilinos pagan por un piso tiene que ser igual al arriendo. El objetivo consiste en, desconociendo las verdaderas valoraciones de los bienes que tengan los agentes, seleccionar la asignación de los bienes y los precios correspondientes que sea eficaz y que los agentes no tengan envidia. En general, los agentes no tendrán los incentivos para revelar sus verdaderas valuaciones sino otras que permitirían conseguir una asignación más favorable. Como consecuencia, los criterios de eficiencia y sin-envidia no estarán logrados. Sin embargo, he demostrado que las posibilidades de los agentes manipular las asignaciones y los precios están limitadas en el equilibrio. Es decir, he demostrado que seleccionando la asignación con los precios correspondientes que sea eficaz y sin-envidia con respecto a las valoraciones anunciadas, y no necesariamente verdaderas, asegura que en los equilibrios de Nash y Nash Fuerte la asignación seleccionada también es eficaz y sin-envidia con respecto a las valoraciones verdaderas.El tercer capítulo se trata de subastas cuando hay un comprador dominante que desalienta la participación de otros compradores en la subasta, y como la consecuencia los precios suban poco. El objetivo consiste en comparar varias formas de subastas que han sido diseñadas para fomentar la participación. En literatura se han propuesto una mezcla de la subasta inglesa y holandesa. El uso de la subasta holandesa beneficia a los participantes desfavorecidos y por lo tanto aumenta su participación y los ingresos del vendedor. Eso ocurre a coste de eficiencia, se puede ganar la subasta no teniendo la valoración más alta entre los compradores. Nosotros hemos propuesto una subasta alternativa para fomentar la participación y que consiste de la subasta inglesa en dos etapas. En la primera etapa se fija un precio de reserva y si nadie está dispuesto a pagarlo hay la segunda etapa sin precio de reserva. Los participantes potenciales en la segunda etapa aprenden que los que ya han entrado en la primera etapa no tienen las valoraciones altas, por lo tanto tienen mayor probabilidad de ganar. Eso, en vez, atrae mayor participación. Eligiendo un precio de reserva apropiado genera al vendedor más ingresos y además es más eficaz que la otra subasta.El último capítulo consiste del análisis empírico de las subastas que lleva a cabo la compañía "Bosques Estatales de Letonia" para vender el derecho de talar los árboles en los bosques del estado a empresas privadas. La compañía en cada subasta ofrece varios lotes de bosque, y los lotes se venden en secuencia. Los compradores que estén interesados en la dicha lote, compiten en la subasta inglesa. La teoría económica sugiere que el orden en que se venden los lotes es importante cuando los lotes son heterogéneos - los ingresos del vendedor son mayores si empiezan con los lotes más valiosos y venden en el orden decreciente por valor. Mi objetivo es contrastar la dicha hipótesis. El análisis econométrico prosigue en dos etapas. Primero, dado el supuesto que se vende la lote siempre y cuando su valor supera el precio inicial que el vendedor ha fijado, he estimado un modelo de Probit para inferir las valuaciones de los lotes. En la segunda etapa yo contrasto la hipótesis que el orden de la venta no afecta los ingresos del vendedor y no encuentro la evidencia para rechazar la dicha hipótesis. / Besides the introductory chapter, my thesis consists of three essays. In the first essay of my thesis I consider the problem of assigning agents to indivisible objects in which each agent must pay the price of the object he gets and prices must sum to a given number. A standard example is the housemate problem where a group of tenants is sharing an apartment and they must decide who gets which room and how much each must pay, subject to the constraint that the sum of their contributions must equal the rent of the apartment. Previous research concentrated on mechanisms that select an assignment-price pair, which is envy-free and efficient, assuming the knowledge of agents' valuations. However, it is well known that for any mechanism agents have incentives to misrepresent their true valuations if it leads to higher utility. I treat the assignment problem as a game and prove that the mechanism, in which agents are simply required to announce their (possibly false) valuations and an envy-free allocation is selected with respect to these announced valuations, will implement the set of envy-free allocations both in Nash and strong Nash. This means that, in equilibrium, the selected allocation will be envy-free also with respect to the true preferences. I demonstrate that by choosing an efficient and envy-free allocation a social planner does not need to worry about strategic issues, that is, the scope for agents to manipulate the allocations is limited in equilibrium. This result provides a justification on strategic grounds for the use of social choice functions selecting envy-free allocations.The second essay studies auctions when the presence of a strong buyer deters the entry of other potential bidders, preventing competition in the auction and leading to a low sales price. For example, the issue arose during third-generation mobile communication licenses auctions where incumbent firms could effectively discourage entry by threatening to outbid new entrants. As a response, the so-called Anglo-Dutch auction has been proposed to promote entry since the Dutch auction favors weak bidders relative to a pure English auction. However, that is achieved at the cost of efficiency. We propose an alternative two-stage English auction in order to encourage entry. In the first stage there is a reserve price, and if nobody bids at that price, then a second stage is conducted without the reserve price. Potential entrants of the second stage learn that those who entered in the first stage but did not bid have low valuations. This provides incentives for weak bidders to enter in the second stage. We show that by setting an appropriate reserve price it is possible to generate higher revenues for the seller than in the Anglo-Dutch auction and at the same time maintain efficiency. The latter implies that the two-stage English auction is superior to the Anglo-Dutch auction both from the seller's perspective and from a social welfare point of view.Many real life auctions sell more than one object; objects are usually different and often are sold sequentially; hence the questions arise of how the order of sales affects revenue and what the optimal order of sales is. The last essay addresses these issues. It consists of an empirical analysis of auctions conducted by the Latvian state company selling rights to harvest timber in state forests. In each auction the company offers several lots of forest, and they are sold sequentially through oral, ascending price auctions. Theory suggests that the revenues of the seller are highest when objects are sold in the order of decreasing value. My objective is to test empirically this hypothesis. Since we do not observe the valuations of lots the bidders have, first I estimate them, using a discrete choice model, based on the assumption that a lot will be sold if and only if its valuation exceeds the reserve price. Next, I test the order of sales effect on the revenues of the seller. I do not reject the hypothesis that the order does not have effect on the revenues of seller.