Auction System Research Articles

Managers' Personal Bankruptcy Costs and Risk Taking

Exploiting a bankruptcy reform in Korea, I examine how shareholders' and managers' personal bankruptcy costs affect firms' financing and investment decisions. Under the pre-reform auction system incumbent management is forced to resign and the firm is sold to new investors. Under the post-reform management stay system, existing shareholders and incumbent management stay in control of the firm during bankruptcy proceedings. I find that firms curb risk-taking under the auction system, when bankruptcy states are costlier for managers and shareholders. Specifically, firms take on lower leverage, forego risky investment projects, and undertake less innovation under the auction regime. The effects are stronger for firms where private benefits of control are large and firms in which managers' wealth is more concentrated in the firm.

Auction System for Automated E-Commerce: JADE based Multiagent Application

With the advancements in World Wide Web and high speed internet the scenario of traditional shopping system has changed completely and e-shopping has gained popularity as it furnishes human with a feeling of easiness. But this e-shopping system is also being badly off for the involvement of human efforts and time to a great extent. To minimize this human intervention automation in e-commerce is like a blessing and use of agent technology is the best way to achieve this. In this context use of negotiation strategies and protocols mentioned in literature in developing systems which automates the whole e- shopping system is required. And so, here in this paper we present a multi-agent application using JADE, based on real world e- commerce; it automates an English auction by applying Kasbah negotiation strategies in order to minimize human intervention and ensures that the product is being sold at its best price.

The Psychological Force Model for Lowest Unique Bid Auction

We study a type of complex system arising from economics, the lowest unique bid auction (LUBA) system which is a new generation of online markets. Different from the traditional auction in which the winner is who bids the highest price, in LUBA, the winner is whoever places the lowest of all unique bids. In this paper, we propose a multi-agent model to factually describes the human psychologies of the decision-making process in LUBA. The model produces bid-price distributions that are in excellent agreement with those from the real data, including the whole inverted-J shape which is a general feature of the real bid price distribution, and the exponential decreasing shape in the higher price range. This implies that it is possible for us to capture the essential features of human psychologies in the competitive environment as exemplified by LUBA and that we may provide significant quantitative insights into complex socio-economic phenomena.

Carbon Pricing: Design, Experiences and Issues, edited by LarryKreiser, MikaelAndersen, BirgitteOlsen, StefanSpeck, JanetMilne and HopeAshiabor. Published by Edward Elgar Publishing, Cheltenham, UK, 2015, 256 pages. ISBN: 9781785360220, ₤75.

Carbon Pricing: Design, Experiences and Issues, edited by LarryKreiser, MikaelAndersen, BirgitteOlsen, StefanSpeck, JanetMilne and HopeAshiabor. Published by Edward Elgar Publishing, Cheltenham, UK, 2015, 256 pages. ISBN: 9781785360220, ₤75.

Renewable Energy Auctions and Tenders: How good are they?

This paper analyses the performance of two cases of renewable energy (RE) auction/tender systems in an effort to contribute to the evaluation of RE auction/tender systems and to study best practice in their delivery of RE projects. This is done by comparing regimes in different settings, one concerned with Danish offshore wind development, the other concerned with renewable energy development in South Africa. It is found that regulatory factors which promote certainty in deployment, including measures to ensure that projects achieve grid connection, are important in assuring delivery of the programmes. However cost reductions that are associated with renewable energy auctions are not caused mainly by the auction systems themselves, but rather are associated with general declines in the costs of renewable energy technologies. Moreover, the effect of renewable energy auctions systems may be more concerned with limiting renewable energy deployment rather than reducing the costs of energy generated by renewable energy projects that are deployed.

Market policy and destructive network effects

Purpose – The purpose of this paper is to analyse how different policy perspectives or logics regarding industry organising affect network interaction, with particular focus on how the availability of resources is organised. Design/methodology/approach – To examine this, the authors compare two cases from the Norwegian seafood industry: in the pelagic industry, the main resource (mackerel) is caught at sea by fishing vessels and trade is restricted by an auction system, whereas in the salmon industry, the main resource (farmed salmon) is an industrial product produced at fish farms and there are no such restrictions. Findings – The results indicate that conditions under which resources are available to a network have strong effects on connected relationships: in the pelagic industry, interaction in the network becomes supplier-directed in an attempt to reduce the uncertainty created by unstable and restricted availability of resources, whereas in the salmon industry the interaction becomes customer directed as resource availability is stable and predictable. Here the actors can broaden the scope of interaction and they can direct their efforts to solve their customers’ problems, whereas this is difficult in the pelagic industry. The authors conclude that policy considerations play a major role in these effects. If the resource (fish) is seen as a commodity and the interaction is seen as a market mechanism, the policies designed to facilitate the exchange of resources will be beneficial for the actors directly involved, but may have unintended negative consequences for indirect relationships. Originality/value – For policy makers this implies that whenever developing an industrial policy there are strong reasons to look beyond the single transaction in order to create policies that are effective and/or beneficial for all involved and connected parties.

An Open Source Advertisement System

A new online advertisement system and its implementation for the Yioop open source search engine are presented. This system supports both selling advertisements and displaying them within search results. The selling of advertisements is done using a novel system to auction off daily impressions for keyword searches. This is an open, ascending price auction system in which all accepted bids will receive a fraction of the auctioned day’s impressions. New bids in our system are required to be at least one half of the sum of all previous bids ensuring the number of accepted bids is logarithmic in the total ad spend on a keyword for a day. The mechanics of creating an advertisement, attaching keywords to it, and adding it to an advertisement inventory are described. The algorithm used to go from accepted bids for a keyword to which ads are displayed at search time is also presented. We discuss properties of our system and compare it to existing auction systems and systems for selling online advertisements.

Optimization Approach for Resource Allocation on Cloud Computing for IoT

Combinatorial auction is a popular approach for resource allocation in cloud computing. One of the challenges in resource allocation is that QoS (Quality of Service) constraints are satisfied and provider's profit is maximized. In order to increase the profit, the penalty cost for SLA (Service Level Agreement) violations needs to be reduced. We consider execution time constraint as SLA constraint in combinatorial auction system. In the system, we determine winners at each bidding round according to the job's urgency based on execution time deadline, in order to efficiently allocate resources and reduce the penalty cost. To analyze the performance of our mechanism, we compare the provider's profit and success rate of job completion with conventional mechanism using real workload data.

Asset price and trade volume relation in artificial market impacted by value investors

The relationship between return and trade volume has been of great interests in a financial market. The appearance of asymmetry in the price–volume relation in the bull and bear market is still unsettled. We present a model of the value investor traders (VIs) in the double auction system, in which agents make trading decision based on the pseudo fundamental price modelled by sawtooth oscillations. We investigate the system by two different time series for the asset fundamental price: one corresponds to the fundamental price in a growing phase; and the other corresponds to that in a declining phase. The simulation results show that the trade volume is proportional to the difference between the market price and the fundamental price, and that there is asymmetry between the buying and selling phases. Furthermore, the selling phase has more significant impact of price on the trade volume than the buying phase.

An Efficient Electronic English Auction System with a Secure On-Shelf Mechanism and Privacy Preserving

With the rapid development of the Internet, electronic commerce has become more and more popular. As an important element of e-commerce, many Internet companies such as Yahoo! and eBay have launched electronic auction systems. However, like most electronic commerce products, safety is an important issue that should be addressed. Many researchers have proposed secure electronic auction mechanisms, but we found that some of them do not exhibit the property of unlinkability, which leads to the leakage of users’ privacy. Considering the importance of privacy preservation, we have designed a new auction mechanism. Through symmetrical key establishment in the registration phase, all messages transmitted over the Internet would be protected and, meanwhile, achieve the property of unlinkability. The security analysis and performance analysis show that our protocol fulfills more security properties and is more efficient for implementation compared with recent works.

Design of multi-agent-based online auction in mobile environment

Mobile e-commerce is the trend for future business. Sellers and bidders can use smart phones or other mobile devices to participate in online auction activities in the mobile environment, which will greatly save their time and enrich customer journey. In this paper, the mechanism of mobile auction system is first discussed, followed by the framework design of multi-agent mobile auction system and deployment of this system on both mobile ends. Then registry mechanism, bid submission, interactions of agents and algorithm of winner determination are introduced and regarded as key technologies and in the mobile auction system. Finally, an online auction app is designed to simulate the processes of mobile auction. Performance of this system is tested accordingly, which reflected great improvement of convenience brought by the mobile auction system through solving the problems of facilities and time limitation.

Threat Modelling of Virtual Machine Migration Auction

The auction process in Virtual Machine migration is a new concept to enhance the availability of the cloud resources by the business federation of Cloud Service Providers. In this process, the complete communication is performed over the Internet, which is in-secured. In addition, the VM auction is handled by the bidding module, which is a single application over the hypervisor. Though the hypervisor is carefully protected by available security techniques, we cannot ensure the security of the bidding module for this auction in VM migration. Before arguing the security of the VM migration auction system (VMMA), it is necessary to identify various threats to the system. Careful investigation enables the system administrator and its developer to build organized security requirements and protection mechanism. In this paper, we build a threat and security model for the VMMA system. The key components of the VMMA system are analyzed, and various possible threats are discussed.

A Multi-Attribute Auction Mechanism based on Conditional Constraints and Conditional Qualitative Preferences

Auctioning multi-dimensional items is a key challenge, which requires rigorous tools. This study proposes a multi-round, first-score, semi-sealed multi-attribute reverse auction system. A fundamental concern in multiattribute auctions is acquiring a useful description of the buyers' individuated requirements: hard constraints and qualitative preferences. To consider real requirements, we express dependencies among attributes. Indeed, our system enables buyers eliciting conditional constraints as well as conditional preferences. However, determining the winner with diverse criteria may be very time consuming. Therefore, it is more useful for our auction to process quantitative data. A challenge here is to satisfy buyers with more facilities, and at the same time keep the auctions efficient. To meet this challenge, our system maps the qualitative preferences into a multi-criteria decision rule. It also completely automates the winner determination since it is a very difficult task for buyers to estimate quantitatively the attribute weights and define attributes value functions. Our procurement auction looks for the outcome that satisfies all the constraints and best matches the preferences. We demonstrate the feasibility and measure the time performance of the proposed system through a 10-attribute auction. Finally, we assess the user acceptance of our requirements specification and winner selection tool.

An Analysis of Competitiveness and Potential of Renewable Energy Technologies in Poland

Since the adoption of the 2009/28/EC Directive several renewable energy sources (RES) bills have appeared proposing completely different support mechanisms. The act was finally passed on the 20th of February 2015, with quite surprising abandonment of tradable green certificates as the primary support instrument in favour of an auctioning system. The paper aims to assess the competitiveness and capability of development of individual RES technologies in Poland in the auctioning system based on a critical evaluation of the proposed legal regulations and the levelized cost of electricity (LCOE) for each technology. Results indicate that auctions will be dominated by small- and medium-scale biomass technologies (1–50 MW). This includes retrofitting of existing medium plants and converting them into biomass CHP. Only wind is capable of competing with biomass technologies. The main shortcomings of the RES bill are: (1) system is extremely complicated, subject to bureaucracy, and arbitrary in key aspects; (2) the limitation in the auctions for so-called unstable technologies; (3) the absence of a real support system for microinstallations; (4) the lack of support for green heat; (5) cause further intensification of the dominating presence of power corporations at the expense of other market participants (6) cause further concentration of the declining RES technologies on the market and the overuse of the renewable yet limited power source, biomass.

Algorithmic game theory and econometrics

The traditional econometrics approach for inferring properties of strategic interactions that are not fully observable in the data, heavily relies on the assumption that the observed strategic behavior has settled at an equilibrium. This assumption is not robust in complex economic environments such as online markets where players are typically unaware of all the parameters of the game in which they are participating, but rather only learn their utility after taking an action. Behavioral models from online learning theory have recently emerged as an attractive alternative to the equilibrium assumption and have been extensively analyzed from a theoretical standpoint in the algorithmic game theory literature over the past decade. In this letter we survey two recent works, [Nekipelov et al. 2015, Hoy et al. 2015], in which we take a learning agent approach to econometrics, i.e. infer properties of the game, such as private valuations or efficiency of observed allocation, by only assuming that the observed repeated behavior is the outcome of a no-regret learning algorithm, rather than a static equilibrium. In both works we apply our methods to datasets from Microsoft's sponsored search auction system.

Pengelolaan Kelembagaan Lelang Lebak Lebung dan Perilaku Nelayan di Kabupaten Muara Enim Provinsi Sumatera Selatan

<p>The study aims to (1) Analyzing attitude of the fishermen towards management system in Lebak Lebung (knowladge, behaviour, and manner), (2) to describing auction system of Lebak Lebung, (3) and to analyze the external and internal characteristic between the institutional and the fishermen towards open waters managed in Lebak Lebung. The study was conducted using survay methods thourgh decriptive analysis and corellation methode which the samples of this study are 100 fishermen in Muara Enim –Sub distict-. The result showed that (1) Lebak Lebung is the open water district which consist of river area and land that forms marshes (lebak) and low land that watery (lebung). Lebak Lebung will be a fishes breeding in ebb season, and in the flow season Lebak Lebung used by villager to catch fishes. The ownership of fish resources in Lebak Lebung will be given to Pegemin auction as a winner of area Lebak Lebung thourgh aution system. The aims of Lebak Lebung-auction is to obtain the income areas, and conservation of Lebuk Lebung, and avoid the confilcts between fishermen.(2) the highly behaviour : knowladge, behaviour, and manner of fihermen in Lubuk Lebung auctions management. (3) Internal characteristic, Lebak lebung institutional and external characteristics that relating to the behavior of fishermen is the level of education, the number of dependents experience of fishermen effort, income of the fishermen, rule, punishment, the performance of fishermen group, the government policy.<br />Keywords: auction, fishermen custom, institutional, Lebak Lebung</p>

Economical–environmental impact of subsidised renewable energy sources for electricity (RES-E) in the Spanish system

In 2012, Spain obtained 68.5TWh of its electricity (25% of the total) from renewable energy sources excluding large hydroelectric power (RES-E). Subsidies, through feed-in-tariffs, for various forms of RES-E ranged from 40.2€/MWh to 321.1€/MWh and totaled 6.1 billion E, an amount that has motivated substantial criticism. This paper examines the effects of RES-E on the market price of electricity considering the merit order effect in Spain's power auction system. The M5P algorithm developed by Quinlan (1992) is used to calculate changes in the settling price in daily power auctions. Also, the value of emissions of CO2, NOx, and SOx avoided through RES-E is calculated. They are valued at $10/t, $478/t, and $1460/t, respectively. Results of the analysis show that, in 2012, RES-E caused an estimated 3.1 B€ savings in electricity expenditures due to market effects and a 0.7 B€ saving in emission costs. When subtracted from the total subsidy a net cost of RES-E of 2.3 B€ is derived. Wind, biomass, and small hydroelectric had negative net costs (i.e., net benefits) while photovoltaic and solar-thermal power had net costs. Alternative scenarios in which the production of gas-fired and coal-fired electric power are individually curtailed by 30% in comparison to the baseline scenario, while RES-E is held at the 2012 level, yielded a net cost decrease of about 300M€ for gas curtailment and a net cost increase of about 300M€ for coal curtailment.

Auction-based highway reservation system an agent-based simulation study

Based on previous studies of a highway reservation system, this paper proposed an auction-based implementation, in which the users can bid for the right to use a route during a certain period of time. This paper models the auction system with MATSim using an agent-based simulation technique. The agents adopt their own bidding logic in the auction, and the price converges after around 130 iterations, when the number of users using the reserved highway and the total collected revenue become stable. When the overall demand changes, the collected revenue ranges from 5 to 11 dollars per user, and from 0.7 to 1.5 dollars per mile. The auction system can transfer more consumer surplus to the toll road operators, since it is a personalized tolling mechanism. The users are using the reservation system as insurance of a guaranteed congestion-free travel. The auction-based highway reservation shows great potential as a new traffic management system.

Multiagent model and mean field theory of complex auction dynamics

Recent years have witnessed a growing interest in analyzing a variety of socio-economic phenomena using methods from statistical and nonlinear physics. We study a class of complex systems arising from economics, the lowest unique bid auction (LUBA) systems, which is a recently emerged class of online auction game systems. Through analyzing large, empirical data sets of LUBA, we identify a general feature of the bid price distribution: an inverted J-shaped function with exponential decay in the large bid price region. To account for the distribution, we propose a multi-agent model in which each agent bids stochastically in the field of winner’s attractiveness, and develop a theoretical framework to obtain analytic solutions of the model based on mean field analysis. The theory produces bid-price distributions that are in excellent agreement with those from the real data. Our model and theory capture the essential features of human behaviors in the competitive environment as exemplified by LUBA, and may provide significant quantitative insights into complex socio-economic phenomena.

Closing Call Auction Prices as Settlement Prices for Derivatives Contracts and Price Manipulation

Previous literature emphasizes the importance of a closing call auction system because it can not only improve the price discovery effect, but also mitigate the possibility of price manipulation. However, Korea Exchange, which has adopted a closing call auction system, has still suffered from the price manipulation, most cases of which are likely to be related to the derivatives contracts. Based on this environment, this paper investigates why KRX experiences the closing price manipulations so much, even though it adopted the closing call auction system. Generally, a price manipulation occurs when the legal/administrative penalty is less than the expected economic gain or when a specific market structure increases an incentive to manipulate the price. In this paper, we find that the adoption of a closing call auction price as a settlement price for KOSPI derivatives contracts strengthens the incentive for closing price manipulation, which is supported by Kyle (2007). Kyle (2007) shows that if a closing price is used as a settlement price and investors can execute the ‘market-on-expiration orders’ surely, the derivatives with cash settlement are susceptible to the price manipulation such as squeezing or cornering, equally as the derivatives with physical settlement. As such, KRX is the only financial market that satisfies the above conditions. This paper tries to verify this argument by introducing the Hong Kong Exchange case, the Korean ELS-related manipulation case and the Deutsche Bank case. Therefore, we strongly recommend changing the settlement price of KRX derivatives contracts into an average price, which is similar with the well-developed financial markets.