In this work, I look at two competitive auction settings where a profit maximizing seller chooses auctions as a vehicle to sell to strategic bidders. In both essays, the auctioneers problem is the selection of the optimal auction format. In the first essay, the auctioneer has a single item to sell while in the second essay, there are two items. In this work, I use game theoretic methods to derive the best course of action for the buyer and use this to arrive at the best course of action for the auctioneer.
In essay 1, I consider a hybrid (between English outcry and second price sealed bid) auction format where at any point in time, the identity of the highest bidder and the second highest price is known to all. I show that this format would generate higher revenues than the English outcry format if the bidders valuations are interdependent. This is because of lesser risk of overpayment and winners curse for the bidders in the hybrid auction and consequently, they are better off bidding their valuations earlier. Such behavior results in a quicker convergence of the outstanding price to the final price realized as the bidders can update their valuations with certainty. I test this claim by comparing objects auctioned in Yahoo! and eBay as eBay follows the hybrid action format while Yahoo! follows the English outcry format and do find that with interdependent object valuations revenue from the hybrid auction format is higher.
In the second essay, I consider an auctioneer who has two items to sell. These could be complements or substitutes or independent products. Given a pool of strategic bidders, I investigate whether he is better off auctioning the items sequentially or as a bundle. To do so, I first solve the bidders optimization problem and use the solution to arrive at the implications for the seller. I find that with a moderate number of bidders (N>4), it is optimal to bundle strong complements only. On the other hand, I find that bundling is optimal when the number of bidders is less than four.
| Identifer | oai:union.ndltd.org:PITT/oai:PITTETD:etd-07312005-235656 |
| Date | 06 September 2005 |
| Creators | Subramaniam, Ramanathan |
| Contributors | Esther Gal-Or, J.Jeffrey Inman |
| Publisher | University of Pittsburgh |
| Source Sets | University of Pittsburgh |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.library.pitt.edu/ETD/available/etd-07312005-235656/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to University of Pittsburgh or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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