The first chapter of this thesis gives a detailed picture of commonly used structural estimation techniques for several types of auction models. Next chapters consist of essays in which these techniques are utilized for empirical analysis of auction environments. In the second chapter we discuss the identification and estimation of the distribution of private signals in a common value auction model with an asymmetric information environment. We argue that the private information of the informed bidders are identifiable due to the asymmetric information structure. Then, we propose a two stage estimation method, which follows the identification strategy. We show, with Monte-Carlo experiments, that the estimator performs well. Third chapter studies Outer Continental Shelf drainage auctions, where oil and gas extraction leases are sold. Informational asymmetry across bidders and collusive behavior of informed firms make this environment very unique. We apply the technique proposed in the second chapter to data from the OCS drainage auctions. We estimate the parameters of a structural model and then run counterfactual simulations to see the effects of the informational asymmetry on the government's auction revenue. We find that the probability that information symmetry brings higher revenue to the government increases with the value of the auctioned tract. In the fourth chapter, we make use of the results in the multi-unit auction literature to study the Balancing Energy Services auctions (electricity spot market auctions) in Texas. We estimate the marginal costs of bidders implied by the Bayesian-Nash equilibrium of the multi-unit auction model of the market. We then compare the estimates to the actual marginal cost data. We find that, for the BES auction we study, the three largest bidders, Luminant, NRG and Calpine, have marked-down their bids more than the optimal amount implied by the model for the quantities where they were short of their contractual obligations, while they have put a mark-up larger than the optimal level implied by the model for quantities in excess of their contract obligations. Among the three bidders we studied, Calpine has come closest to bidding its optimal implied by the Bayesian-Nash equilibrium of the multi-unit auction model of the BES market.

Research on auctions that involve more than one identical item for sale was,almost non-existing in the 90’s, but has since then been getting increasing attention. External incentives for this research have come from the US spectrum, sales, the European 3G mobile-phone auctions,  and Internet auctions. The policy relevance and the huge amount of money involved in many of them have helped the theory and experimental research advance. But in auctions where values are equal across bidders, common value auctions, that is, when the value depends on some outside parameter, equal to all bidders, the research is still embryonic. This thesis contributes to the topic with three studies. The first uses a Bayesian game to model a simple multi-unit common value auction, the task being to compare equilibrium strategies and the seller’s revenue from three auction formats; the discriminatory, the uniform and the Vickrey auction. The second study conducts an economic laboratory experiment on basis of the first study. The third study comprises an experiment on the multi-unit common value uniform auction and compares the dynamic and the static environments of this format. The most salient result in both experiments is that subjects overbid. They are victims of the winner’s curse and bid above the expected value, thus earning a negative profit. There is some learning, but most bidders continue to earn a negative profit also in later rounds. The competitive effect when participating in an auction seems to be stronger than the rationality concerns. In the first experiment, subjects in the Vickrey auction do somewhat better in small groups than subjects in the other auction types and, in the second experiment, subjects in the dynamic auction format perform much better than subjects in the static auction format; but still, they overbid. Due to this overbidding, the theoretical (but not the behavioral) prediction that the dynamic auction should render more revenue than the static fails inthe second experiment. Nonetheless, the higher revenue of the static auction comes at a cost; half of the auctions yield negative profits to the bidders, and the winner’s curse is more severely widespread in this format. Besides, only a minority of the bidders use the equilibrium bidding strategy.The bottom line is that the choice between the open and sealed-bid formats may be more important than the choice of price mechanism, especially in common value settings.

This dissertation consists of two essays on the topic of bidding in multi-unit common value auction. Essay one examines the role of capacity constraint on the auction results and bidding behavior. We consider a general case where bidders are unconstrained, and a second setting where bidders are capacity constrained. We document downward sloping demand curves for individual bidders. Bidders shade their bids by submitting quantity-price pairs and spreading their bids. The winner's curse is strong in the unconstrained treatment, but we find no evidence of the winner's curse when bidding constraints are imposed. Unconstrained bidders shade bids significantly more and their quantity-weighted prices are much lower than those in the constrained treatment. Interacting with the information structure, the capacity constraint has a significant impact on the auction results including the market clearing price, market efficiency, and the degree of market concentration. We provide evidence that efficient price discovery in multi-unit auctions with diverse information is possible, but careful attention to auction design will make this outcome more likely. Essay two examines how the introduction of a noncompetitive bidding option affects outcomes in a multi-unit uniform-price auction. The experimental design incorporates many of the characteristics of the markets that pertain to the issuance of new equity securities. Important features of the bidding environment include endogenous bidder entry, costly information acquisition, bidders that differ by capacity constraint, and substantial uncertainty with respect to the intrinsic value. We use a standard uniform-price auction as our baseline setting where only competitive bids are accepted. Our results show that introducing the noncompetitive bidding option improves auction performance by increasing revenue and reducing price error. Underpricing is found in both treatments, but is less severe in the presence of the noncompetitive bidding option. The incorporation of this option significantly increases both the small bidder participation rate and allocation, and reduces the incentive for small bidders to free ride by submitting extremely high bids. Under both treatments, information acquisition increases large bidders' profits but proves unprofitable for small bidders, and pricing accuracy is increasing in the rate of information acquisition.

No description available.

Research on auctions that involve more than one identical item for sale was,almost non-existing in the 90’s, but has since then been getting increasing attention. External incentives for this research have come from the US spectrum, sales, the European 3G mobile-phone auctions,  and Internet auctions. The policy relevance and the huge amount of money involved in many of them have helped the theory and experimental research advance. But in auctions where values are equal across bidders, common value auctions, that is, when the value depends on some outside parameter, equal to all bidders, the research is still embryonic. This thesis contributes to the topic with three studies. The first uses a Bayesian game to model a simple multi-unit common value auction, the task being to compare equilibrium strategies and the seller’s revenue from three auction formats; the discriminatory, the uniform and the Vickrey auction. The second study conducts an economic laboratory experiment on basis of the first study. The third study comprises an experiment on the multi-unit common value uniform auction and compares the dynamic and the static environments of this format. The most salient result in both experiments is that subjects overbid. They are victims of the winner’s curse and bid above the expected value, thus earning a negative profit. There is some learning, but most bidders continue to earn a negative profit also in later rounds. The competitive effect when participating in an auction seems to be stronger than the rationality concerns. In the first experiment, subjects in the Vickrey auction do somewhat better in small groups than subjects in the other auction types and, in the second experiment, subjects in the dynamic auction format perform much better than subjects in the static auction format; but still, they overbid. Due to this overbidding, the theoretical (but not the behavioral) prediction that the dynamic auction should render more revenue than the static fails inthe second experiment. Nonetheless, the higher revenue of the static auction comes at a cost; half of the auctions yield negative profits to the bidders, and the winner’s curse is more severely widespread in this format. Besides, only a minority of the bidders use the equilibrium bidding strategy.The bottom line is that the choice between the open and sealed-bid formats may be more important than the choice of price mechanism, especially in common value settings.

The major internet auction sites eBay and Yahoo have developed innovative hybrid auction designs that incorporate buy prices. My dissertation focuses on the Buy It Now (BIN, hereafter) version of the auctions on eBay, the largest online auction site. The BIN hybrid auction combines a standard ascending bid auction with a posted-price offer. A seller in a BIN auction lists his auction with a "buy price". A bidder may purchase the item immediately at the buy price and end the auction. If he places a bid instead, the option to purchase the item at the buy price disappears and the subsequent bidders participate in the standard eBay auction. This auction format has been very popular with both buyers and sellers. In 2005 eBay's sales in fixed price platform (BIN and Half.com) totaled $13.8 billion, which was 33.1% of eBay's total sales.The dissertation explores the BIN auctions using theory, experiments and field data. Chapter 1 theoretically analyzes BIN auctions within the common values framework. An equilibrium is characterized, shown to exist, and the revenues generated by BIN and standard eBay auctions are compared. Chapter 2 compares the bidding behavior and the revenue implications of BIN auctions in lab experiments under common and private value assumptions. The third develops an "incomplete" theoretical model of BIN auctions within the private values framework. An "incomplete" empirical specification is derived and then field data collected from eBay's BIN auctions are used to estimate the primitives of the model, including the bidders' risk aversion and time preference. I then explore how heterogeneity of sellers and items influence these primitives. Chapter 1 (Common Values Auctions with a Buy Price: the case of eBay): Several explanations for the popularity of buy price have been provided for independent private value auctions. Risk aversion and impatience of either the bidders or the seller have mainly been used to explain the popularity of buy prices in IPV models. This paper, using a pure common value framework, models auctions with eBay-style "temporary" buy prices, when the bidders and the seller are either risk neutral or risk averse. It characterizes equilibrium bidding strategies in a general setup and then analyzes a seller's incentive to post a buy price when there are two bidders. When bidders are either risk neutral or risk averse there is no incentive to post a buy price for a risk neutral seller. But when the seller is risk averse, a suitably chosen buy price can raise the seller's expected utility when the bidders are either risk neutral or risk averse. Chapter 2 (An Experimental Study of Auctions with a Buy Price Under Private and Common Values): We use experiments to examine several predictions from the theoretical studies of buy prices. The theoretical predictions from Wooders and Reynolds (2003) and Chapter 1 show that the introduction of a buy price causes the seller's revenue to move in opposite directions in private value and common value settings. Meanwhile, Mathews and Katzman (2006) find that risk averse sellers might find buy prices advantageous because they reduce the variance in seller revenue in eBay auctions with risk-neutral bidders. The lab experiments are used to answer three key questions. (a) Can a buy price raise seller revenue and lower the variance of seller revenue in an independent private value auction? (b) Does a buy price lower seller revenue in common value auctions? (c) If the theoretical predictions do not hold, can a behavioral model explain the patterns observed in the data? Using a between-subjects design the results show that the use of a buy price has a positive and statistically significant effect on seller revenue in private value auctions. The buyers are risk averse. The estimate of the Constant Absolute Risk Aversion (CARA) index of 1.11 for the bidders is equivalent to a Constant Relative Risk Aversion (CRRA) index of 0.62 which is centered within the range of other estimates of relative risk aversion. As predicted by the theory when buyers are risk averse, the use of a buy price yields a statistically significant reduction in the variance of seller revenue. Hence, as predicted, the use of a buy price is advantageous to the seller when either the bidders or the seller are risk averse. The results for common value auctions are inconsistent with the theoretical predictions. Use of a buy price did not lower seller revenue, and the bidders' behavior departed from theoretical predictions in several respects. As a result, we develop and estimate a behavioral model of common value BIN auctions based on the winner's curse and overweighting of a bidder's private information. We find statistically significant evidence of overweighting of the bidder's own signal and estimated a CARA index of 0.001. This behavioral model explains all the departures from the rational model we found in the common values experiments. Chapter 3 (The Buy-it-now Option, Risk Aversion, and Impatience in an Empirical Model of eBay Bidding): Haile and Tamer (2003) first used an incomplete econometric model in an auction context, assuming that bidders bid up to their values and do not allow an opponent to win at a price they are willing to beat. Canals-Cerda and Pearcy (2004) used a similar incomplete econometric model to study eBay auctions while adding the assumption that the maximum of all the bids placed by the bidder with the second highest value is exactly equal to his value. Chapter 3 extends these incomplete models to eBay's BIN auctions. We develop and estimate an equilibrium model for BIN independent private value auctions with a stochastic and unknown number of potential bidders who enter the auction sequentially. In the model risk averse and time impatient bidders buy at the BIN price because it allows them to avoid the uncertainties and delay of the ascending bid auction that takes place if no one chooses the BIN option. As a result, the bidders' decisions to choose the BIN option in BIN auctions of different lengths can be used to identify the bidders' risk aversion and time preference parameters. Our model is "incomplete" in the sense that we do not impose any stylized structure on bidding in the ascending bid auction and, although bid revision is allowed, the process is not explicitly described. Our "incomplete" econometric model uses a partial likelihood approach proposed by Cox (1975) that allows the analysis to bypass modeling bidding and the bid revision process. The model is estimated using a new data set of 3245 eBay auctions of Pentium-3 laptops that ran between 22 July to 10 August 2005.

In this essay an analysis of values will be conducted on the novel Pojkarna by Jessica Schiefauer. The analysis will be done on the basis of Anders Palm's value theory, especially with his two literary characteristics ”emotionalitet” and ”interrogativitet”. Furthermore, an examination will be made on how this novel could be used in teaching swedish in senior high school from a common value-system perspective, and a teacher's and three students' view on utilizing the novel while working with the common value-system. It appears that literature has its own inherent value, but that there are also different external values that are shown by the literary characteristics that Palm writes about in his value theory. The values it focus on in the novel Pojkarna are equality, everyone's equal value and norm criticism. These are the values that are the focus of this essay because it is what the teacher and students choose to discuss during the interviews. It appears that the novel can easily be used in teaching swedish and that it is easy to justify its use considering the school's governing documents. It is also visible during the interviews that the teacher and the students express that they all think it is a good and interesting novel to work with on common value-based issues. / I denna uppsats kommer en analys av värden att göras av romanen Pojkarna av Jessica Schiefauer. Denna analys kommer att göras med hjälp av Anders Palms värdeteori och då speciellt utifrån hans två litterära egenskaper emotionalitet och interrogativitet. Det kommer också att undersökas hur denna roman kan användas i svenskundervisningen i gymnasieskolan med ett värdegrundsperspektiv, samt hur en lärare och tre elever ser på användandet av romanen vid ett värdegrundsarbete. Det framkommer att litteratur i sig själv har ett eget inneboende värde, men att det också finns olika yttre värden som visas med hjälp av Palm litterära egenskaper. De värden som fokuseras i Pojkarna är jämlikhet, allas lika värde och normkritik. Det är dessa värden som ligger i fokus för denna uppsats på grund av att det är detta som läraren och eleverna väljer att diskutera under intervjuerna. Det framkommer att romanen på ett enkelt sätt går att använda i svenskundervisningen och att det lätt går att motivera användandet av den om man ser till skolans styrdokument. Det går också att se att läraren och eleverna uttrycker under intervjuerna att de alla tycker att det är en bra och intressant roman att arbeta med vid ett arbete med värdegrundsfrågor.

This thesis investigates how competition effects in government procurement auction are affected by the risk distribution between the procurer and the winning bidder. The risk distribution is linked to the conditions of payment which is assumed to be largely determined by the procurer. Thus, by investigating whether competition effects are different dependent on the risk distribution, this thesis contributes to the previous literature which almost exclusively model competition effects to be determined exogenous sources of uncertainty and characteristics of the market. There is a previous literature on the effects of various payment conditions in auctions but it mostly considers ex post moral hazard issues, and not effects on the competitive behavior at the bidding stage. An econometric analysis is conducted on auctions of infrastructure construction contracts held by the Swedish Transport Administration between 2010 and 2013. The results suggest that the choice of risk distribution can shift an auction from having no competition effects in bidding to strong bid-reducing competition effects. Seemingly, the procurer appears to face a trade-off between avoiding risk and enjoying bid-reducing competition effects. The difference in competition effects between contracts with fixed and more flexible payment conditions is found to increase with the auctioned project’s expected duration. In terms of government procurement policy, the results suggest that it can be cost-efficient for the procuring entity to share the risk with the contractor in risky projects instead of avoiding risk with fixed price contracts. Whilst this may contradict some common notions regarding government procurement, it is in line with the wide use of flexible payment conditions in private-sector procurement. Arguably, the recent decade’s increased ambitions regarding innovation and sustainability in government procurement adds even further weight to these policy considerations for the risk management of procurers.

This thesis is about the economic aspects of public procurement of services through auctionsin Sweden. It focuses on two different institutions, auctions used to find foste r-parents forboarded out children in the 19th century, and auctions of cleaning service contracts in the 20 thcentury. I n both cases, the contracting entity is the municipality or its representative, thelowest bidder wins the auction, and is paid in accordance with his/her bid.In the child auctions, c hildren were allotted to foster-parents by means of an open biddingprocess, the descending English auction, where the bids were given continuously to theauctioneer. In modern public procurement sealed bids ar e used in accordance with the firstprice,sealed bid auction. The first part of this thesis is about price formation in the childauctions and a study is made of the children who were auctioned several times, indicatingasymmetric information among bidders or adverse selection in this market. These subjects arestudied using field data on 601 child auctions held in Northern Sweden during the period 1863to 1889. The empirical findings in the first paper suggest that the foster-parents had a cleareconomic motive in these auctions. The child characteristics significantly affect the amount ofcompensation paid to the foster-parent. There is also evidence that farmers preferred older,more productive children. The second paper studies whether a re-auctioned child commandeda higher or lower price than a child that was not re-auctioned. The results indicate some formof asymmetric information because foster-parents demanded a higher level of compensationfor a re-auctioned child. The results also suggest that the probability that a child was reauctionedincreased if he/she was not healthy.The third paper in the thesis discusses a kind of "paradox". Although there is a competitiveeffect on the bids in the auction of cleaning service contracts, the contracting entity has anoption, given by law, to restrict the number of bidders. In th is paper, an implementation costis introduced fo r the contracting entity to justify such a restriction. The results, based onSwedish municipality data, indicate that contract and municipality characteristics, assumed toaffect the implementation cost, affect the volume of the procurement, and the number ofbidders, but not necessarily the choice of allocation mechanism. The final paper studiesregional differences in bids, costs, and competition in municipal procurement using the samedata as in paper [3]. The results show higher estimated costs for completing the contract, butlower estimated mean bids in the major city area of Stockholm compared with the res t of thecountry. This is explained by lower profit margins and higher operational costs in the majorcity area. An analysis is also carried out of why the lowest bidder is not always the contractedbidder. / <p>Härtill 4 delar.</p> / digitalisering@umu

Submitted by Otávio Menezes Damé (omenezes@fgvmail.br) on 2015-03-25T16:46:08Z No. of bitstreams: 1 tese-otavio.pdf: 1370659 bytes, checksum: 924be04b7a6bae788714a583878c9ce3 (MD5) / Approved for entry into archive by BRUNA BARROS (bruna.barros@fgv.br) on 2015-03-31T14:12:14Z (GMT) No. of bitstreams: 1 tese-otavio.pdf: 1370659 bytes, checksum: 924be04b7a6bae788714a583878c9ce3 (MD5) / Approved for entry into archive by Marcia Bacha (marcia.bacha@fgv.br) on 2015-04-14T11:47:19Z (GMT) No. of bitstreams: 1 tese-otavio.pdf: 1370659 bytes, checksum: 924be04b7a6bae788714a583878c9ce3 (MD5) / Made available in DSpace on 2015-04-14T11:47:31Z (GMT). No. of bitstreams: 1 tese-otavio.pdf: 1370659 bytes, checksum: 924be04b7a6bae788714a583878c9ce3 (MD5) Previous issue date: 2014-12-11 / Brazilian government recently passed legislation instituting a new regulatory framework for the pre-salt reserves. These areas should be negotiated through a profit-share bidding auction. Motivated by this new rules, we present a model of share bidding auction under affiliation, demonstrating the existence of a monotone pure-strategy equilibrium in this structure and characterize its equilibrium bidding function. In addition, we prove that it generates an expected revenue at least as large as the usual fee bidding auction. Next, we introduce in the models a function representing a royalty rate that is contingent to the value of the object. This instrument permits an improvement of expected revenue of both models, making the gap between them shrink. Finally, analyzing this new regulatory framework from the viewpoint of the theoretical and numerical results obtained, we conclude that the former oil regime was more appropriate and lucrative to Brazilian government. / O governo brasileiro recentemente aprovou uma legislação instituindo um novo marco regulatório para as reservas petrolíferas do pré-sal. Segundo as novas regras, estas áreas deverão ser licitadas mediante um leilão de partilha de lucro. Motivado por esta mudança, apresentamos um modelo de leilão de partilha sob afiliação, demonstrando a existência de um equilíbrio monótono em estratégias puras e caracterizando a solução. Alem disso, provamos que este mecanismo gera receita esperada maior ou igual a um leilão de primeiro preço usual. Em seguida, introduzimos no modelo uma função representando taxas de royalties que dependem do valor do objeto. Este instrumento permite uma elevação na receita esperada de ambos os modelos, fazendo com que a diferença entre eles encolha. Finalmente, analisando o novo marco regulatório sob o ponto de vista dos resultados obtidos, concluímos que o antigo modelo de concessão utilizado pelo governo brasileiro é mais adequado e lucrativo.