Bid Increments Research Articles

Lower price increases, the bounded rationality of bidders, and underbidding concerns in online agricultural land auctions: The Ukrainian case

AbstractAuction theory suggests that bidders follow a dominant strategy that is to submit the highest bid equal to the bidder's true valuation in an ascending price auction with independent and private values. Bidders in real‐world auctions may deviate from this strategy, resulting in either underbidding—submitting bids lower than the valuation—or overbidding—bidding an amount in excess of the real value. This study utilises data collected from online agricultural land lease auctions in Ukraine that took place between October 2018 and September 2019 to analyse the occurrence of minimal price increases, which may indicate underbidding. It investigates if factors—auction and property characteristics—that typically explain deviations from the dominant strategy—can also explain bidding behaviours in land lease auctions. The estimation using a heteroscedastic probit model reveals that underbidding could reasonably be attributed to low competition, insufficient time to place a subsequent bid, very small bid increments, and cumbersome entry fees.

Effects of Minimum Bid Increments in Internet Auctions: Evidence from a Field Experiment

I study the role of minimum bid increments (MBI) in internet auctions using natural field experiment data from a Finnish online auction site Huuto.net. Internet auctions are typically viewed as second‐price, implying truthful bidding. However, due to the presence of the MBI, equilibrium bidding behavior involves bid shading. I sell otherwise identical gift cards while varying the MBI and test between truthful bidding and bid shading. Truthful bidding is rejected. Consistently with equilibrium behavior, bid shading increases as the MBI increases. This implies that real‐world bidders are capable of reacting rationally even to seemingly small variations in their strategic environment.

Identification and estimation of a bidding model for electronic auctions

Because of discrete bid increments, bidders at electronic auctions engage in shading instead of revealing their valuations, which would occur under the commonly assumed second‐price rule. We demonstrate that misspecifying the pricing rule can lead to biased estimates of the latent valuation distribution, and then explore identification and estimation of a model with a correctly specified pricing rule. A further challenge to econometricians is that only a lower bound on the number of participants at each auction is observed. From this bound, however, we establish nonparametric identification of the arrival process of bidders—the process that matches potential buyers to auction listings—which then allows us to identify the latent valuation distribution without imposing functional‐form assumptions. We propose a computationally tractable, sieve‐type estimator of the latent valuation distribution based on B‐splines, and then compare two parametric models of bidder participation, finding that a generalized Poisson model cannot be rejected by the empirical distribution of observables. Our structural estimates enable us to explore information rents and optimal reserve prices on eBay. eBay electronic auctions bid increments pricing rule D44 C72

The Devil is in the Details: Lessons from the Indian Spectrum Auctions

The Indian telecom growth as in other countries, largely driven by mobile, saw its teledensity reach nearly 87% by 2016 over a population base of nearly 1.2 bn. As is the trend globally, spectrum has become a critical resource for further growth in the sector, especially with greater demand for data. In India, the initial slow growth was largely attributed to the Department of Telecommunication’s (DoT) design of auctions and the mismatch of the auction outcomes with the market reality. Limited amount of spectrum made available for mobile services and high population densities created a spectrum crunch. Further, given the potential of growth in the market and telecom policies that encouraged competition led to about 10-14 service providers per state creating a further pressure on spectrum. In addition, difficult exit rules and M&A guidelines reduced the scope for consolidation, creating operational and financial pressure for operators. These factors influenced bidding/acquisition of spectrum. From 1995-2010, India largely adopted spectrum auctions other than in 2007-08 when it adopted first-come-first-serve (FCFS) policy for 2G. In 2010, it adopted a sophisticated simultaneous multiple round (SMRA) auctions for 3G. Subsequently, a Supreme Court judgment in 2012 canceled all licenses awarded through FCFS and mandated that all spectrum had to be allocated through auctions. Subsequent auction designs have used SMRA for different bands. The last auction was in 2016. It was a multi-band auction covering 700MHz, 800MHz, 900 MHz, 1800 MHz, 2300 MHz, and 2500 MHz. The 700 MHz band, which is a valued band for 3G and 4G saw no buyers and the 2500 Mhz band which did not have a well developed ecosystem saw significant competition and was allocated. The above raises issues about the efficacy of auction design. While the DoT accepted SMRA as an efficient and effective auction mechanism, it recognized that the specific design elements such as reserve price, withdrawal rules, stopping rules, minimum bid increments have influenced bid outcomes. These parameters needed to incorporate the context of the auction such as requirements of spectrum for different bidders, expectations about future availability, competitor’s bidding strategies, whether single or multiple bands, etc. We plan to document the spectrum auction design, bidder strategies and outcomes, for the auction held in 2016. This auction provides a rich backdrop for the study as it was held in an environment where several prior auctions that had poor outcomes in terms of participation, bid amounts and amount of spectrum made available and new regulations regarding spectrum sharing and trading had become operational. The competitive environment had also changed significantly with possibilities of future M&A. We shall identify the learning from the analysis so as to help with the subsequent auction designs. Such recommendations will also take into account developments in this space in other countries. Methodology: We shall follow the case based approach and document the same using secondary sources of data.

Clinical Benefit of Ruxolitinib Treatment after Crossover from Best Available Therapy in Patients with Polycythemia Vera: Analysis of the RESPONSE Trial

Background: Polycythemia vera (PV) is a myeloproliferative neoplasm characterized by erythrocytosis, and in many cases leukocytosis and thrombocytosis. PV is driven by activating mutations in the JAK/STAT pathway, primarily JAK2V617F. For high-risk patients, a commonly used first-line therapy is hydroxyurea (HU); however, a subgroup of patients become intolerant of or resistant to HU. The phase 3 RESPONSE trial compared ruxolitinib (RUX) and best available therapy (BAT) in patients with PV who were intolerant of or resistant to HU (modified European LeukemiaNet criteria). Patients randomized in the BAT arm were permitted to cross over to receive RUX from Week 32 of the study. The results of the primary analysis comparing RUX to BAT prior to crossover have been reported, in which RUX was superior to BAT in achieving hematocrit control, reductions in spleen volume, and improvements in PV-related symptoms. This current analysis was conducted to evaluate the efficacy of RUX treatment in patients who crossed over from BAT relative to their original BAT treatment and relative to those originally randomized to RUX.Methods: Enrollment criteria included PV diagnosis, age ≥18 years, resistance to or intolerance of HU, splenomegaly, and phlebotomy requirement to control hematocrit. Patients were randomized 1:1 to receive open-label RUX 10 mg BID or BAT administered based on investigator judgment. BAT may have included HU, interferon/pegylated interferon, pipobroman, anagrelide, immunomodulators (eg, lenalidomide or thalidomide), or no medication. The protocol allowed for dose modifications (RUX, 5-mg BID increments [25 mg BID max]; BAT was adjusted per investigator judgment). Patients in the BAT group could cross over to RUX from Week 32 if they had not met the primary endpoint, or after Week 32 due to protocol-defined disease progression. The primary study endpoint was a composite of hematocrit control and a ≥35% reduction in spleen size at Week 32. Hematocrit was assessed at screening, every 2 weeks from Day 1 to Week 12, followed by every 4 weeks until Week 32, and 2, 4, 6, 8, 16, 24, and 32 weeks following crossover. Spleen volume was assessed by magnetic resonance imaging at screening and study Weeks 16, 32, 48, 64, 80 and every 32 weeks thereafter. The number of phlebotomy procedures was evaluated over time in each group.Results: A total of 110 patients were randomized to RUX and 112 to BAT; study discontinuation by Week 32 (before crossover was permitted) was 11% in both groups. However, most patients in the BAT arm crossed over to receive RUX treatment immediately after the Week 32 visit (84% between Weeks 32 and 48); only 3% of patients remained in the BAT arm compared with 85% in the RUX arm at the time of the data analysis (median 81-week follow-up). With up to 32 weeks on BAT therapy, 25% of patients in this group did not require a phlebotomy; in contrast, with up to 32 weeks on RUX, 79% of patients after crossover and 74% of patients initially randomized to RUX did not require phlebotomy. The number of phlebotomy procedures adjusted for 100 patient-years during BAT therapy was 196.8 vs 38.5 after crossover to RUX and 34.1 on randomized RUX treatment. Reduction in spleen volume from baseline at any visit occurred in 49% of patients receiving BAT, vs 73% of patients after crossover to RUX and 88% of patients initially randomized to RUX. The proportion of patients achieving at least a 35% reduction in spleen volume (best percentage change) was 1.8% during BAT treatment vs 38.5% after crossover to RUX and 60.0% during randomized RUX treatment.Conclusion: Treatment with RUX after crossover from BAT resulted in improved clinical outcomes compared with original BAT treatment. These findings support the primary RESPONSE results and further validate the efficacy of RUX in this patient population. DisclosuresKiladjian:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Off Label Use: Ruxolitinib is a JAK1/JAK2 inhibitor approved for the treatment of patients with intermediate or high-risk myelofibrosis, including primary myelofibrosis, post polycythemia vera myelofibrosis, and post-essential thrombocythemia myelofibrosis. Vannucchi:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Masszi:Novartis Pharmaceuticals: Membership on an entity’s Board of Directors or advisory committees. Durrant:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Harrison:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Mesa:Incyte Corporation: Research Funding; CTI: Research Funding; Gilead: Research Funding; Genentech: Research Funding; Eli Lilly: Research Funding; Promedior: Research Funding; NS Pharma: Research Funding; Sanofi: Research Funding; Celgene: Research Funding. Jones:Incyte Corporation: Employment, Equity Ownership. He:Incyte Corporation: Employment, Equity Ownership. Li:Novartis Pharmaceuticals : Employment, Equity Ownership. Habr:Novartis Pharmaceuticals: Employment, Equity Ownership. Verstovsek:Incyte Corporation: Research Funding.

Changes in Quality of Life and Disease-Related Symptoms in Patients with Polycythemia Vera Receiving Ruxolitinib or Best Available Therapy: RESPONSE Trial Results

Background: Polycythemia vera (PV) is a myeloproliferative neoplasm driven by JAK/STAT activation and is associated with erythrocytosis and a broad symptom burden that may negatively impact patient quality of life (QoL). Hydroxyurea (HU) is often used as first-line therapy for high-risk patients but may not effectively control or reduce symptom burden. RESPONSE is a phase III trial comparing ruxolitinib (RUX) with best available therapy (BAT) in patients with PV who were intolerant of or resistant to HU according to modified European LeukemiaNet (ELN) criteria. The primary study endpoint (a composite of hematocrit control and ≥35% spleen volume reduction at Week 32) was achieved by 21% of patients in the RUX arm vs 1% in the BAT arm (P<0.0001); 77% of patients in the RUX arm achieved at least one component of the primary endpoint. The current analysis was conducted to evaluate the effect of RUX on PV-related symptoms and QoL measures in the RESPONSE trial.Methods: Patients with PV aged ≥18 years, resistant to or intolerant of HU (modified ELN criteria) with splenomegaly, and who required phlebotomy for hematocrit control were randomized 1:1 to receive open-label RUX 10 mg twice daily (BID) or BAT (administered based on investigator judgment). Dose adjustments were permitted (RUX, 5-mg BID increments [25 mg BID max]; BAT was adjusted per investigator judgment). Objectives of this analysis included assessment of improvement in symptom burden as assessed by patient-reported outcomes using the 14-item modified Myeloproliferative Neoplasm Symptom Assessment Form (MPN-SAF), the Pruritus Symptom Impact Scale (PSIS), the European Organization for the Research and Treatment of Cancer Quality of Life Questionnaire-Core 30 (EORTC QLQ-C30), and the Patient Global Impression of Change. The 14-item MPN-SAF (graded from 0 [absent] to 10 [worst imaginable]) comprised symptoms related to cytokines (tiredness, itching, muscle ache, night sweats, and sweats while awake), hyperviscosity (vision problems, dizziness, concentration problems, headache, numbness/tingling, ringing in ears, and skin redness), and splenomegaly (abdominal discomfort and early satiety). Changes in total symptom score (TSS; maximum score = 140) and individual symptom scores from baseline to Week 32 were summarized by treatment group. For the EORTC QLQ-C30 Global Health Status/QOL score, the percentage of patients with a minimally important difference (MID) from baseline (10-point change) at Week 32 was summarized.Results: Overall, 222 patients were randomized (RUX, 110; BAT, 112). Median age (range) was similar between arms (RUX, 62.0 [34.0–90.0]; BAT, 60.0 [33.0–84.0]); the RUX and BAT arms were 60% and 71% male, respectively. At Week 32, a higher proportion of patients in the RUX vs the BAT arms had a ≥50% improvement in MPN-SAF TSS (49% vs 5%, respectively) and MPN-SAF symptom cluster scores (cytokine, 64% vs 11%; hyperviscosity, 37% vs 13%; splenomegaly, 62% vs 17%). Median percentage changes in individual symptom scores are presented in the Table. Mean changes from baseline at Week 32 on the 5 items of the PSIS indicated that the severity of pruritus and its interference on daily life improved with RUX (range, −1.5 to −2.2) and was unchanged/worsened with BAT (range, −0.1 to 0.3). Treatment with RUX vs BAT was associated with improved mean changes from baseline at Week 32 on EORTC QLQ-C30 symptom subscales, functional subscales, and Global Health Status/QOL (Table); 46% of RUX patients versus 10% of BAT patients achieved an MID in Global Health Status/QOL (Figure). At Week 32, RUX patients were more likely to rate their global impression of symptom changes as “very much improved” or “much improved” (67%) vs BAT patients (13%).Conclusion: In patients with PV who were resistant to or intolerant of HU, treatment with RUX was associated with greater and clinically meaningful improvements in PV-related symptom burden and QoL measures compared with BAT. [Display omitted] [Display omitted] DisclosuresMesa:Incyte Corporation: Research Funding; CTI: Research Funding; Gilead: Research Funding; Genentech: Research Funding; Eli Lilly: Research Funding; Promedior: Research Funding; NS Pharma: Research Funding; Sanofi: Research Funding; Celgene: Research Funding. Off Label Use: Ruxolitinib is a JAK1/JAK2 inhibitor approved for the treatment of patients with intermediate or high-risk myelofibrosis, including primary myelofibrosis, post polycythemia vera myelofibrosis, and post-essential thrombocythemia myelofibrosis. Verstovsek:Incyte Corporation: Research Funding. Kiladjian:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Masszi:Novartis Pharmaceuticals: Membership on an entity’s Board of Directors or advisory committees. Durrant:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. Harrison:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding. He:Incyte Corporation: Employment, Equity Ownership. Jones:Incyte Corporation: Employment, Equity Ownership. Parasuraman:Incyte Corporation: Employment, Equity Ownership. Li:Novartis Pharmaceuticals: Employment, Equity Ownership. Côté:Novartis Pharmaceuticals: Employment, Equity Ownership. Habr:Novartis Pharmaceuticals: Employment, Equity Ownership. Vannucchi:Novartis Pharmaceuticals: Honoraria, Membership on an entity’s Board of Directors or advisory committees, Research Funding.

Of Pennies and Prospects: Understanding Behaviour in Penny Auctions

Penny auctions are a novel selling mechanism, which combines an auction with elements of a lottery. Using a large dataset gathered online, I show that penny auction profitability - while high on average - is negative for low-value goods. Early bids have lower expected return and low bid increments are associated with greater profits. I develop a prospect theory model of penny auction bidding and show that it replicates all these stylised facts; parameter estimates are in line with the literature. This adds further evidence on the usefulness of prospect theory in providing a descriptive theory of behaviour under risk. Moreover, I show that prospect theory outperforms the rationalistic alternative hypothesis of risk-loving bidders.

Effects of Minimum Bid Increment in Internet Auctions: Evidence from a Field Experiment

I study the role of minimum bid increments (MBI) in internet auctions using field experiment data. I sell identical gift cards while varying the MBI. Internet auctions have typically been viewed as second-price, implying truthful bidding. However, due to the presence of the MBI, equilibrium bidding behavior involves bid-shading. I test between truthful bidding and equilibrium bidding. Truthful bidding is rejected. Bidders conduct bid-shading in a pattern consistent with equilibrium bidding. I also report that the revenue maximizing level for the MBI is higher than zero and the eBay level is close to optimal. Moreover, a high MBI inefficiently limits entry.

744P - Early Data from a Phase I Study of Nintedanib (BIBF 1120) in Asian Patients with advanced Hepatocellular Carcinoma

ABSTRACT Background Nintedanib is an oral, triple angiokinase inhibitor targeting VEGFRs, PDGFRs and FGFRs. This multicentre, open-label, phase I/randomised phase II study (NCT00987935; phase II ongoing) evaluated the efficacy, safety and pharmacokinetics of nintedanib versus sorafenib in patients (pts) with advanced hepatocellular carcinoma (HCC) from Asia, where HCC is endemic and has unique clinical features. Phase I data are presented. Methods Phase I pts had histologically, cytologically or clinically confirmed HCC, ECOG performance status ≤2, Child-Pugh (CP) score ≤7, and ≤1 line of prior systemic therapy. Using a 3 + 3 design, pts were stratified into two groups by liver function and CP score: (I) AST and ALT ≤2 x upper limit of normal (ULN), and CP 5–6; (II) AST or ALT >2 x to ≤5 x ULN, or CP 7. Nintedanib (given continuously in 28-day courses) was started at 50mg bid (group II) or 100mg bid (group I) and increased in 50mg bid increments up to 200mg bid. Therapy was continued until no clinical benefit or undue toxicity. The phase I primary endpoint was the maximum-tolerated dose (MTD) of nintedanib. Results Overall, 35 pts have received nintedanib: 11 in group I(100/150/200 mg bid, n = 4/3/4; median [range] duration: 140 [10–337] days) and 24 in group II (50/100/150/200 mg bid, n = 3/7/3/11; median [range] duration: 81 [2–587] days). In group I, no dose-limiting toxicities (DLTs) were seen at any dose during the first course. In group II, one pt experienced a DLT (CTCAE Grade [G] 3 AST increase) at 100 mg bid in Course 1 (dose-escalation phase). The MTD of nintedanib was thus 200 mg bid in both groups. DLTs seen after MTD assessment were G4 gastrointestinal (GI) haemorrhage/anaemia (50 mg bid), G3 ALT increase (150 mg bid), G3 GI haemorrhage (150 mg bid), G3 hypertension (200 mg bid; n = 2) and G4 gastric ulcer (200 mg bid). The most common adverse events, by system organ class, were GI (83%) and general/administration site disorders (51%), and investigations (51%). Hypertension and rash (any grade) occurred in 6 and 8 pts, respectively. Conclusions Nintedanib has an acceptable safety profile in this Asian HCC population. As in other cancer types and European HCC pts, the MTD of nintedanib was 200 mg bid. Disclosure C. Yen: Chia-Jui Yen: research funding from Boehringer Ingelheim. Y. Shen: Ying-Chun Shen: research funding from Boehringer Ingelheim. H. Shiah: Her-Shyong Shiah: research funding from Boehringer Ingelheim. J. Chen: Jo-Pai Chen: research funding from Boehringer Ingelheim. C. Hsu: Chiun Hsu: research funding from Boehringer Ingelheim. C. Hsu: Chih-Hung Hsu: research funding from Boehringer Ingelheim. D.C. Huang: Dennis Chin-Lun Huang: employee of Boehringer Ingelheim. J. Hocke: Julia Hocke: employee of Boehringer Ingelheim. W. Su: Wu-Chou Su: research funding from Boehringer Ingelheim. A. Cheng: Ann-Lii Cheng: research funding from Boehringer Ingelheim.

Design of online auctions: Proxy versus non-proxy settings

Recent years have witnessed the rapid development of online auctions. Currently, some online auctions, such as eBay, introduce a proxy bidding policy, under which bidders submit their maximum bids and delegate to a proxy agent to automatically outbid other competitors for the top bidder, whereas other online auctions do not. This paper compares these two widely used auction mechanisms (proxy setting and non-proxy setting) and characterizes the equilibrium bidding behavior and the seller's expected revenue. We find the proxy auction outperforms the non-proxy auction in terms of the seller's expected revenue. This dominance result is not prone to the specific bid announcement policy, the bidder's knowledge regarding the number of bidders, the impact of traffic congestion along the bidding process, the number of items sold through the auction, and the existence of a reserve price. We further find that the proxy setting usually fails to sustain the truthful bidding as a dominant strategy equilibrium even if no minimum bid increments are adopted, and the possibility of a low-valuation-bidder dilemma where the low-valuation bidders could be better off if all bidders collude to bid at the last minute. We also discuss the dramatically different equilibrium bidding behaviors under the two auction mechanisms.

Bubbles, Crashes and Efficiency with Double Auction Mechanisms

We provide two novel dynamic double auction (DA) mechanisms for a class of economies and study their convergence property to competitive equilibrium. For DA mechanisms, we find a parameter on the two sequences of the marginal bid increments (bid step-size) and ask decrements (ask step-size) that is important for the two mechanisms to reach an equilibrium. For an economy selling multiple identical copies of a single asset, this parameter  steers the price process generated by the two mechanisms to equilibrium, bubble or crash. Our study provides evidence in theory that shows that the double auction, as a trading institution, may not be so efficient as what has been claimed by the efficient markets hypothesis (EMH). The source of inefficiency comes from the o -balance in the two sequences of the marginal bid increments and ask decrements. Such o -balance shifts total demand and supply curves of the original economy and is seized by this parameter  in a subtle manner. We also show that bounded stochastic noise or irrationality in orders cannot distort the two mechanisms from reaching equilibrium. Therefore, our study is important for both EMH and the study of behavioral finance.

On the pricing rule in electronic auctions

Researchers and experts have typically viewed electronic auctions (such as those implemented by eBay, Amazon, and Yahoo!) as either oral, ascending-price (English) auctions or second-price, sealed-bid (Vickrey) auctions. I show that important theoretical differences exist between English and Vickrey pricing rules and those used in electronic auctions, due to the presence of bid increments. I also show, using data on eBay laptop sales, that these differences have practical significance. I explore the implications of bid increments for strategic bid selection in a static model within the symmetric independent private-value paradigm. I derive the unique symmetric equilibrium bid function, showing that the presence of bid increments can significantly alter bidder behavior. Using numerical methods, I also illustrate that these result in a highly non-linear bid function, in contrast to that predicted under either the English or the Vickrey formats.

Phase II trial of pharmacodynamically (PDally)-guided optimal biologic dose titration (OBDT) of sorafenib (S) in combination with metronomic cyclophosphamide (mC) in advanced neuroendocrine tumors (aNET)

3526 Background: There is a paucity of reliable PD assays for guiding individual OBDT. PD effects of kinase inhibitors have been previously measured in static tissues. We developed a dynamic flow-cytometric PD assay that quantitates RAF signal transduction capacity (STC) based on the differential MEK´s phosphor-status in stimulated vs. basal conditions (phosphor-shift [PS]) in PBMCs. In a pilot study of 7 patients (pt) with advanced solid tumors in a phase I trial (unpublished data) the % of PS inhibition (I) 7 days after starting S at 400 mg BID showed a 10-fold interpatient variation and correlation with TTP. PDGFR-B/VEGFR2 blockade plus mC showed synergistic effect in the RIP1-Tag2 mouse NET model (J Clin Oncol. 23:939) In this phase II trial of aNET a double antiagniogenic strategy is undertaken: PD-guided OBDT of S + mC. Methods: Eligibility criteria included: unresectable NET with documented PD within 6 months prior to entry; ECOG 0–2; unlimited prior therapy but S; octreotide allowed. Therapy: pt start run-in phase with S at 200mg bid + 50 mg QD fixed dose of mC. After 7 d they escalate to 400 mg BID of S regardless of RAF STC assay results. RAF STC and toxicity are then assessed Q14d, escalating S at 200 mg BID increments until any of the following is achieved: a) 90% RAF STC I; b) maximum S dose of 800 mg BID; or c) intolerable Gr 2 or G3+ toxicity. Once S dose is determined based on these criteria, cycle 1 begins. Design: Simon 2-stage optimal; P0 = 0.05 P1 = 0.2; α =0.05 β = 0.1. Results: Accrual: 10 pt M:F = 6:4, islet cell:carcinoid = 5:5, age median 56 (40–79), ECOG 0:1 = 5:5. S doses (mg BID) at cycle 1 were 200 (2 pt)/400 (5)/600 (2)/800 (1); corresponding cycle 1 day 1RAF STC I (%) were 5, 53/94, 100, 95, 16, 65/25, 41/71, respectively (R2 = 0.13 p = 0.72) Most frequent Gr 3 non-hematologic possibly related adverse events in 30 cycles: hand-foot (2 pt), hypertension, abdominal pain, diarrhea, vomiting, lipase, ileal perforation (1 each). Disease control rate (9 evaluable pt): 78% (95% CI: 52–100%) (1PR, 6 SD). Conclusions: This approach appears feasible/safe. Large interpatient S dose differences are needed to achieve RAF SCT I/toxicity balance. No S dose-RAF SCT I relation is shown. Disease control rate is promising. No significant financial relationships to disclose.

On the Pricing Rule in Electronic Auctions

Researchers and experts have typically viewed electronic auctions (such as those implemented by eBay, Amazon, and Yahoo!) as either oral, ascending-price (English) auctions or second-price, sealed-bid (Vickrey) auctions. I show that significant differences exist, both theoretical and practical, between English and Vickrey pricing rules and those used in electronic auctions. In addition, in a static model, within the symmetric independent private-values (IPV) paradigm, I derive the unique symmetric equilibrium bid function, showing that the presence of bid increments can significantly alter bidder behavior. Using numerical methods, I also illustrate that these result in a highly non-linear bid function, in contrast to that predicted under either the English or the Vickrey formats.

The effects of proxy bidding and minimum bid increments within eBay auctions

We present a mathematical model of the eBay auction protocol and perform a detailed analysis of the effects that the eBay proxy bidding system and the minimum bid increment have on the auction properties. We first consider the revenue of the auction, and we show analytically that when two bidders with independent private valuations use the eBay proxy bidding system there exists an optimal value for the minimum bid increment at which the auctioneer's revenue is maximized. We then consider the sequential way in which bids are placed within the auction, and we show analytically that independent of assumptions regarding the bidders' valuation distribution or bidding strategy the number of visible bids placed is related to the logarithm of the number of potential bidders. Thus, in many cases, it is only a minority of the potential bidders that are able to submit bids and are visible in the auction bid history (despite the fact that the other hidden bidders are still effectively competing for the item). Furthermore, we show through simulation that the minimum bid increment also introduces an inefficiency to the auction, whereby a bidder who enters the auction late may find that its valuation is insufficient to allow them to advance the current bid by the minimum bid increment despite them actually having the highest valuation for the item. Finally, we use these results to consider appropriate strategies for bidders within real world eBay auctions. We show that while last-minute bidding (sniping) is an effective strategy against bidders engaging in incremental bidding (and against those with common values), in general, delaying bidding is disadvantageous even if delayed bids are sure to be received before the auction closes. Thus, when several bidders submit last-minute bids, we show that rather than seeking to bid as late as possible, a bidder should try to be the first sniper to bid (i.e., it should “snipe before the snipers”).

Simultaneous Independent Online Auctions with Discrete Bid Increments

Decentralized multi-item auctions offer great opportunities for integrating fragmented online auction markets into larger markets with more efficient outcomes. This paper extends the theory of multi-item ascending auctions of substitutes by considering any finite positive bid increment and allowing the bidders to bid asyn-chronously instead of bidding in a round-robin fashion. We consider a setup where the bidders' utilities over multiple items are additive and bound the maximum inefficiency in the allocation when the bidders follow a simple greedy strategy. We also obtain the limits within which the prices of individual items can vary from one outcome to another. For the special case of single unit bidder demand, we also bound the maximum surplus which a bidder can extract by unilaterally switching to some other strategy. The paper suggests an upper bound for the minimum required bid increment which would be necessary for competitive price discovery and truthful bidding in a practical online implementation.

Replicating Online Yankee Auctions to Analyze Auctioneers' and Bidders' Strategies

We present a simulation approach that provides a relatively risk-free and cost-effective environment to examine the decision space for both bid takers and bid makers in web-based dynamic price setting processes. The applicability of the simulation platform is demonstrated for Yankee auctions in particular. We focus on the optimization of bid takers' revenue, as well as on examining the welfare implications of a range of consumer-bidding strategies—some observed, some hypothetical. While these progressive open discriminatory multiunit auctions with discrete bid increments are made feasible by Internet technologies, little is known about their structural characteristics, or their allocative efficiency. The multiunit and discrete nature of these mechanisms renders the traditional analytic framework of gametheory intractable (Nautz and Wolfstetter 1997). The simulation is based on theoretical revenue generating properties of these auctions. We use empirical data from real online auctions to instantiate the simulation's parameters. For example, the bidding strategies of the bidders are specified based on three broad bidding strategies observed in real online auctions. The validity of the simulation model is established and subsequently the simulation model is configured to change the values of key control factors, such as the bid increment. Our analysis indicates that the auctioneers are, most of the time, far away from the optimal choice of bid increment, resulting in substantial losses in a market with already tight margins. The simulation tool provides a test bed for jointly exploring the combinatorial space of design choices made by the auctioneer's and the bidding strategies adopted by the bidders. For instance, a multinomial logit model reveals that endogenous factors, such as the bid increment and the absolute magnitude of the auction have a statistically significant impact on consumer-bidding strategies. This endogeniety is subsequently modeled into the simulation to investigate whether the effects are significant enough to alter the optimal bid increments or auctioneer revenues. Additionally, we investigate hybrid-bidding strategies, derived as a combination of three broad strategies, such as jump bidding and strategic-at-margin (SAM) bidding. We find that hybrid strategies have the potential of significantly altering bidders' likelihood of winning, as well as their surplus.