Bidding Game Research Articles

Methylnaltrexone in the Treatment of Opioid-Induced Constipation in Cancer Patients Receiving Palliative Care: Willingness-to-Pay and Cost-Benefit Analysis

When laxative regimens have failed, methylnaltrexone may be indicated for the relief of opioid-induced constipation (OIC) in patients with advanced illness receiving palliative care. A cost-benefit analysis (CBA), based on a willingness-to-pay (WTP) approach, was performed to determine if methylnaltrexone should be added to the formulary list of drugs being reimbursed by third-party payers in Canada for the treatment of cancer patients in palliative care suffering from OIC. The WTP study had two components: a decision board explaining treatment options (Component A) and a questionnaire to measure individual WTP using a bidding game approach (Component B). Component A had two options: Option 1 (laxatives only) and Option 2 (laxatives+methylnaltrexone injection). Only participants choosing Option 2 were invited to complete Component B. The results of the WTP survey were then incorporated into a CBA. Within a hypothetical cohort, additional monthly premiums that individuals were willing to pay for methylnaltrexone were compared with the monthly costs to the insurer for providing methylnaltrexone to all patients who would potentially be using it. Four hundred one Canadians, of age 18 years and older, were surveyed and yielded a WTP in additional monthly insurance premiums of Canadian dollar (CAD) $8.65 (95% confidence interval: CAD$6.17-CAD$11.13). The CBA resulted in additional CAD$89,307 with a cost of CAD$139,840 and benefits of CAD$229,147. A set of 10,000 Monte Carlo simulations resulted in average CBA savings of CAD$145,011 with a 99.86% probability of dominance. The present CBA provides pharmacoeconomic evidence for theadoption of methylnaltrexone for treating OIC in terminally ill cancer patients.

An economic analysis of willingness to pay (WTP) for conserving the biodiversity

PurposeThe purpose of this paper is to study the impact of eco‐tourism on the socio‐economic characteristics of the native inhabitants and natural resources in Anamalai Tiger Reserve (ATR), India. The paper estimates the recreational value and measures the willingness to pay (WTP) of the stakeholders and tourists to conserve the forest eco‐system.Design/methodology/approachThe paper draws upon theories and issues of eco‐tourism to examine the economic value of forest ecosystem, including direct and indirect use values of the ecological regulatory services. The 60 sample stakeholders of the study were agricultural and forest dependents and tourist dependents in addition to 60 visitors of ATR spot.FindingsThe travel cost had a significant negative influence on frequency of visits, while education had a positive impact. The agriculture and forest dependents, tourist dependents and tourists were WTP an average amount of Rs 202 (US$4.03), Rs 449 (US$9.55) and Rs 656 (US$14.00)/annum, respectively, towards internalizing eco‐tourism‐related externalities. The option value of conserving the ATR was estimated by contingent valuation method using bidding game technique. Education and number of animal species sighted have positively related to WTP and was highly significant.Social implicationsThe paper addresses the attitude of people towards conservation of the forest biodiversity, as well as increasing the income of the people via eco‐tourism.Originality/valueThe outcome implies that eco‐tourism will reduce the dependency of forest and also create more employment and other tourism‐related income augmenting activities and thus enhancing additional income through tourism related occupations. The paper suggests the establishment of several other eco‐parks in Tamil Nadu for protecting the biodiversity as well as generating additional income and improving the livelihood security of the population.

Auslandszahnersatz und Dentaltourismus – Zahlungsbereitschaft und Einflussfaktoren auf die Nachfrage nach ausländischem Zahnersatz in Deutschland

With the progressive realisation of the single European market, public interest has been directed towards cross-border healthcare services to an increasing extent. More and more dentures are being imported into Germany from foreign countries. Furthermore, patients are becoming ever more mobile, travelling to other countries to receive prosthetic treatment from dentists. The objective of this evaluation was to determine by means of a dedicated questionnaire the patients' individual preferences for foreign dentures and the potential savings. 1 368 individuals between the ages of 30 and 75 years were interviewed within a representative omnibus survey. The evaluation of the individual willingness-to-pay included 4 treatment scenarios, which were assessed by the participants in a "bidding game". Participants could choose between a "crown scenario" and an "implant scenario", both with the subcategories "foreign dentures" and "dental tourism". The direct comparison revealed a preference for the "foreign dentures" option over "dental tourism". Average willingness-to-pay for the dental tourism option in the crown scenario was calculated as 80 Euro, and in the implant scenario as 280 Euro less in comparison with the willingness-to-pay for the foreign dentures option. The willingness to switch to a less expensive dentist was one of the main determinants in the causal explanation for the variance in willingness-to-pay. Quality proved to be the decisive criterion and was indicated by 92.4% participants. A lower price for dentures played a subordinate role and was only stated as the decisive factor by 31.1% participants. In conclusion, the results clearly indicate that the decision for or against foreign dentures and the extent of willingness-to-pay depends on a range of criteria, of which "price" is only one and not the decisive factor.

Discrete bidding games

We study variations on combinatorial games in which, instead of alternating moves, the players bid with discrete bidding chips for the right to determine who moves next. We consider both symmetric and partisan games, and explore differences between discrete bidding games and Richman games, which allow real-valued bidding. Unlike Richman games, discrete bidding game variations of many familiar games, such as chess, Connect Four, and even Tic-Tac-Toe, are suitable for recreational play. We also present an analysis of Tic-Tac-Toe for both discrete and real-valued bidding.

Research on Resource Allocation Algorithm Based on MAS Cooperative Technology

With MAS(Multi Agent System)coordinated technology and market bidding game rules, a grid resource allocation model based on market economy was introduced, which could show the relation between supply and demand. The utility function of consumer was given; The results of emulation test showed that the resource allocation algorithm could be a reference to resources of consumers and the approach significantly improves resource utilization, which made the allocation of the whole network resource tend to be more reasonable.

Willingness to Pay for Maternal Health Outcomes

Only a limited number of studies have specifically sought to analyse and try to understand sex differences in willingness to pay (WTP). To identify the role of sex in determining monetary values placed upon improvements in maternal health in Burkina Faso, West Africa. A contingent valuation survey using the bidding game method was conducted in the district of Nouna in 2005; a sample of 409 male heads of households and their spouses were asked their WTP for a reduction in the number of maternal deaths in the Nouna area. Ordinary least squares regression analysis was employed to examine the determinants of WTP. Men were willing to pay significantly more than women (3127 vs 2273 West African francs), although this represented a significantly smaller proportion of their annual income (4% vs 11%). In the multivariate analyses of all respondents there was a significant positive relationship between WTP values and both starting bid and whether there had been a previous maternal complication in the respondent's household. However, there was a significant negative relationship between WTP and female sex. Once interactions between sex and income were taken into account, income did affect valuations, with a positive relationship between higher-income women and WTP values. In absolute terms, men were willing to pay more than women, while women were willing to pay a greater proportion of their income. Differences between men and women in their WTP, both in absolute terms and in terms of proportion of income, can be explained by a household effect. Future studies should distinguish between individual income and command over decision making with respect to use of individual and household income, and gain further insight into the strategies used by respondents in answering bidding game questions.

Value of an Endogenously Asymmetric Toehold: Estimation of a Dynamic Auction Game

In this paper, we formulate and estimate a dynamic auction game where asymmetry is endogenous. The seller sells multiple goods via a sequence of rst price auctions. While bidders are ex-ante symmetric, the rst period winner has an informational advantage in the second period bidding game and becomes a strong bidder. This creates an asymmetric informational toehold in the second stage. This endogenous creation leads to overbidding in the rst period relative to a one period game. We characterize the equilibrium in terms of the observed bid distribution and entry behavior. We suggest a two step estimation procedure to estimate such a dynamic game of creation. The OCS oil tract auctions exhibit one such phenomenon. We apply our method to data on OCS oil tract auctions. We nd that the federal government is only recovering 23% of the ‘strong’buyers’willingness to pay in the second period. Bidders perceive the value of information to be at most 12% of their rst period’s informational rent. A new semiparametric structural test cannot reject the hypothesis of the strong bidder’s informational superiority in the second period and sets it at 18% relative to the weak bidder. We use the estimates to design alternate mechanisms and empirically show that government’s revenue increases when the asymmetry is taken into account in allocating the goods. Keywords: Endogenous Toeholds, Dynamic Auction Estimation, Informational Asymmetry, NonParametric Identi cation and Estimation, Value of Information, Test of Asymmetry, Copulas. Sudip_Gupta@isb.edu. I am indebted to Profs Ken Hendricks, Joris Pinkse and Rob Porter for sharing the data used in this paper. For helpful discussions, without implicating I am thankful to Profs. Siddhartha Bandyopadhyay, Juan Carranza,Yeon Koo Che, Sudipto Dasgupta, Phil Haile, Bruce Hansen, Ali Hortacsu, Sergei Izmalkov, Dennis Kristensen, Jon Levin, David Mcadams, Antonio Merlo, Harry Paarsch, Jack Porter, Lucia Quesada, John Rust, Larry Samuelson, Deepayan Sarkara and seminar participants of the 2005 World Congress of the Econometric Society, seminar participants of the Price College of Business, Oklahoma University , Hong Kong University of Science & Technology, Smith College of Business. All remaining errors are my own.

Willingness to pay for rapid diagnostic tests for the diagnosis and treatment of malaria in southeast Nigeria: ex post and ex ante

BackgroundThe introduction of rapid diagnostic tests (RDTs) has improved the diagnosis and treatment of malaria. However, any successful control of malaria will depend on socio-economic factors that influence its management in the community. Willingness to pay (WTP) is important because consumer responses to prices will influence utilization of services and revenues collected. Also the consumer's attitude can influence monetary valuation with respect to different conditions ex post and ex ante.MethodsWTP for RDT for Malaria was assessed by the contingent valuation method using a bidding game approach in rural and urban communities in southeast Nigeria. The ex post WTP was assessed at the health centers on 618 patients immediately following diagnosis of malaria with RDT and the ex ante WTP was assessed by household interviews on 1020 householders with a prior history of malaria.ResultsFor the ex ante WTP, 51% of the respondents in urban and 24.7% in rural areas were willing to pay for RDT. The mean WTP (235.49 naira) in urban is higher than WTP (182.05 Naira) in rural areas. For the ex post WTP, 89 and 90.7% of the respondents in urban and rural areas respectively were WTP. The mean WTP (372.30 naira) in urban is also higher than (296.28 naira) in rural areas. For the ex post scenario, the lower two Social Economic Status (SES) quartiles were more willing to pay and the mean WTP is higher than the higher two SES while in the ex ante scenario, the higher two SES quartiles were more WTP and with a higher WTP than the lower two SES quartile. Ex ante and ex post WTP were directly dependent on costs.ConclusionThe ex post WTP is higher than the ex ante WTP and both are greater than the current cost of RDTs. Urban dwellers were more willing to pay than the rural dwellers. The mean WTP should be considered when designing suitable financial strategies for making RDTs available to communities.

Willingness to pay for community-based health insurance in Nigeria: do economic status and place of residence matter?

We examine socio-economic status (SES) and geographic differences in willingness of respondents to pay for community-based health insurance (CBHI). The study took place in Anambra and Enugu states, south-east Nigeria. It involved a rural, an urban and a semi-urban community in each of the two states. A pre-tested interviewer-administered questionnaire was used to collect information from a total of 3070 households selected by simple random sampling. Contingent valuation was used to elicit willingness to pay (WTP) using the bidding game format. Data were examined for correlation between SES and geographic locations with WTP. Log ordinary least squares (OLS) was used to examine the construct validity of elicited WTP. Generally, less than 40% of the respondents were willing to pay for CBHI membership for themselves or other household members. The proportions of people who were willing to pay were much lower in the rural communities, at less than 7%. The average that respondents were willing to pay as a monthly premium for themselves ranged from 250 Naira (US$1.7) in a rural community to 343 Naira (US$2.9) in an urban community. The higher the SES group, the higher the stated WTP amount. Similarly, the urbanites stated higher WTP compared with peri-urban and rural dwellers. Males and people with more education stated higher WTP values than females and those with less education. Log OLS also showed that previously paying out-of-pocket for health care was negatively related to WTP. Previously paying for health care using any health insurance mechanism was positively related to WTP. Economic status and place of residence amongst other factors matter in peoples' WTP for CBHI membership. Consumer awareness has to be created about the benefits of CBHI, especially in rural areas, and the amount to be paid has to be augmented with other means of financing (e.g. government and/or donor subsidies) to ensure success and sustainability of CBHI schemes.

Willingness‐to‐pay for reductions in care need: estimating the value of informal care in Alzheimer's disease

To estimate the value of informal care in Alzheimer's disease using contingent valuation. A questionnaire was administered to 517 primary carers in four countries (UK, Spain, Sweden, and US). Dichotomous choice and bidding game methods were used to elicit their willingness to pay for a reduction in care burden by 1 h per day, or a total elimination of care needs. Further, the relationship between carer willingness to pay and carer and patient characteristics including disease severity and income was examined. Carers spend on average about 7-9 h per day on giving care to their patient, of which 4-5 h constituted basic and instrumental ADL tasks. For a 1 h reduction in need for care per day, carers in the UK, Spain, Sweden, and US said that they were willing to pay pound105, pound121, pound59, and pound144 per month respectively. The willingness to pay was higher for carers with higher disposable income while the influence of other determinants varied across countries. About one-third of carers were not willing to pay anything for a reduction in care. Carers' stated willingness to pay for reductions in care giving time is substantial and comparable to the prices currently paid for treatments that achieve this benefit. Its determinants seem more directly related to carer status than directly to patient status and may vary by region and by cultural and sociologic factors.

Dynamic scheduling model of computing resource based on MAS cooperation mechanism

Allocation of grid resources aims at improving resource utility and grid application performance. Currently, the algorithms proposed for this purpose do not fit well the autonomic, dynamic, distributive and heterogeneous features of the grid environment. According to MAS (multi-agent system) cooperation mechanism and market bidding game rules, a model of allocating allocation of grid resources based on market economy is introduced to reveal the relationship between supply and demand. This model can make good use of the studying and negotiating ability of consumers’ agent and takes full consideration of the consumer’s behavior, thus rendering the application and allocation of resource of the consumers rational and valid. In the meantime, the utility function of consumer is given; the existence and the uniqueness of Nash equilibrium point in the resource allocation game and the Nash equilibrium solution are discussed. A dynamic game algorithm of allocating grid resources is designed. Experimental results demonstrate that this algorithm diminishes effectively the unnecessary latency, improves significantly the smoothness of response time, the ratio of throughput and resource utility, thus rendering the supply and demand of the whole grid resource reasonable and the overall grid load balanceable.

On Inferring Demand for Health Care in the Presence of Anchoring and Selection Biases

In the contingent valuation literature, anchoring bias poses problems when using an iterative bidding game to infer willingness to pay. This bias occurs when the willingness to pay estimate is sensitive to the initially presented starting value. More generally, whenever a survey format is used and not all of those contacted participate, selection bias raises concerns about the representativeness of the sample. In this paper, we estimate students' willingness to pay for student health care at Stanford University while accounting for both of these biases. As there is no cost sharing for students, we assess willingness to pay by having a random sample of students play an on line iterative bidding game. Our main results are that (1) demand for student health care is elastic by conventional standards; (2) ignoring anchoring bias would lead to a substantially biased measure of the demand elasticity; and (3) standard selection correction methods indicate no bias from selective non-response and newer bounding methods support this conclusion of elastic demand.

A game of two halves? Incentive incompatibility, starting point bias and the bidding game contingent valuation method

The bidding game (BG) method of contingent valuation is one way to increase the precision of willingness to pay (WTP) estimates relative to the single dichotomous choice approach. However, there is evidence that the method may lead to incentive incompatible responses and be associated with starting point bias. While previous studies in health using BGs test for starting point bias, none have also investigated incentive incompatibility. Using a sample of respondents resident in Burkina Faso, West Africa, this paper examines whether the BG method is associated with both incentive incompatibility and starting point bias. We find evidence for both effects. However, average WTP values remained largely unaffected after accounting for both factors in multivariate analyses. The results suggest that the BG method is an acceptable technique in settings where prices for goods are flexible.

Weather‐risk hedging by farmers

PurposeSmall farmers in developing countries have very little means of managing the weather‐risk to their agricultural produce. Weather derivatives could provide a solution, but the demand for such instruments and the willingness to invest in them needs to be researched. The purpose of this paper is to assess weather‐risk hedging by farmers, focusing on the willingness to pay in Rajasthan, India.Design/methodology/approachThe paper presents results of a contingent valuation study done on the findings of a survey carried out in six villages in the state of Rajasthan. The survey was done on over 500 farmers after explaining the concept of weather derivatives and how they would work to help them hedge their weather‐related yield risk. The survey included questions on factors, which could have a bearing on the farmers' willingness to pay, and a bidding game where responses were solicited to premiums in a hypothetical market. Probit and logit models are used to determine probabilities of “Yes” responses to various bids and the mean willingness‐to‐pay.FindingsThe paper brings out a model, which uses nine independent variables affecting the probability of a farmer saying “Yes” to a price quoted to him for a weather derivative. Using the results from the probit and logit models, the farmers' mean willingness‐to‐pay is determined to be around 8.8 per cent of the maximum possible payout of a weather derivative contract.Originality/valueWith weather derivatives being accepted as a means of risk management for agriculture in developing countries, the willingness‐to‐pay figures determined in this paper would provide an insight to the structuring and pricing of weather derivatives, especially in developing countries.

Resource Allocation Model Based on Non-Cooperative Bidding Game in P2P Network

Game theory is applied to studying the P2P resource allocation technologies further in this paper. The mechanism of P2P resource pricing, which shows the relation of supply and demand, was presented based on bidding. Subsequently, we designed the utility function of end system and proved the existence and uniqueness of Nash Equilibrium in P2P resource allocation game. At last, we present a P2P resource allocation algorithm (PRANG) based on the resource allocation game model. The results of the experiment and the simulation show that PRANG algorithm can provide references for the quantity of resource that users demand and regularize the users' bids. Consequently, the allocation of the whole P2P resource tends to be more reasonable.

Willingness to Pay for a Treatment for Pain in Multiple Sclerosis

Multiple sclerosis (MS) is a chronic neurological disease that affects 240 per 100 000 Canadians. Of these patients, 10-80% (average 70%) experience pain. Sativex is a cannabis-based drug recently approved for neuropathic pain. In this study, we determine individuals' preferences between two treatment options as well as the willingness to pay (WTP) for Sativex, expressed as the amount they would pay in insurance premiums to have access to that treatment. The WTP instrument comprised a decision board as a visual aid, and a questionnaire. A decision board helps clinicians standardize the presentation of treatment information. In this study, the decision board described two treatment options: a three-drug combination (gabapentin, amytriptyline, acetaminophen [paracetamol] {i.e. pills}) and the three-drug combination plus Sativex (i.e. 'pills and oral spray'). Information on efficacy and adverse effects was taken from trial data; wording was guided by a panel of neurologists and tested for clarity on lay people. The instrument was administered to 500 participants from Canada's general population using the bidding game approach. Descriptive statistics were calculated. Mean (SD) age of participants was 39 (13) years, with a female : male distribution of 56 : 44. The decision board was presented in both English (85%) and French (15%). Of 500 interviewees, 253 (50.6%) chose the 'pills and oral spray'. Mean monthly WTP for the insurance premium for those who chose the 'pills and oral spray' was Can dollars 8 (SD +/- 15, median 4, range 0-200). Assuming that 51% of the general population are willing to pay additional premiums as reported in this study, the premiums collected would cover the cost of Sativex for all Canadian MS patients experiencing pain, with a surplus.

Costing the conservation of animal genetic resources: The case of Borana cattle in Ethiopia and Kenya

Individual preferences, changing market conditions, environmental constraints, and regulatory interventions can all contribute towards livestock-keepers in arid environments moving away from their traditional livestock production systems. As a consequence, certain local breeds and the genetic resources they represent may become used less and less, eventually becoming threatened with extinction. Where society considers the maintenance of such genetic diversity to be important, conservation initiatives must be established. The paper presents results from an empirical case study carried out in the Borana lowlands of Ethiopia and Kenya. Conservation costs in the form of local livestock-keeper opportunity costs incurred from keeping the breed targeted for conservation rather than an alternative breed were measured. A contingent valuation, involving 370 households each completing an iterative bidding game, was applied. Respondents stated their willingness to accept compensation for conserving traditional Borana cattle instead of keeping other cattle breeds. The data was analysed using a Tobit model and we conclude that the costs of a community-based conservation programme split between Ethiopia and Kenya, based on a safe minimum herd size, would require €25,400 per year in terms of direct support payments and management and monitoring costs.

Comparison of four contingent valuation methods to estimate the economic value of a pneumococcal vaccine in Bangladesh

To compare four contingent valuation elicitation methods as a means to estimate the value of a pneumococcal vaccine in Bangladesh and to test if the elicitation methods are subject to bias and if they produce valid responses. Three hundred sixty-one households with at least one child under 5 years of age were recruited in Dhaka, Bangladesh. Subjects were cluster-randomized to various elicitation methods: open-ended, dichotomous choice (at one of two asking prices), payment card (one of two cards with differing ranges). The dichotomous choice method was then followed up with a bidding game methodology, with the dichotomous choice price acting as the starting price for the bidding game. Analysis focused on summary statistics, demand curve estimation and multivariate regression analysis to test for validity and bias. Thirty-one households refused to participate, leaving a total of 330 participating households (a 91.4 percent response rate). Willingness to pay estimates varied significantly across the methods (p < .001), with average estimates varying between $2.34 and $18 (US). The open-ended elicitation method was found to produce highly inflated values that were insensitive to construct validity tests. The dichotomous choice method produced quantity (demand) estimates rather than value estimates, and there was some evidence of yea-saying. The payment card elicitation method was found to be affected by range bias. The bidding game elicitation method was found to be less sensitive to starting point bias and yea-saying. Different elicitation format do give rise to different demand curves; however, this may be partially due to the fact that they do not measure the same outcome. For example, the dichotomous choice format produces a demand curve, while the payment card, open-ended and bidding game produce inverse demand curves. All formats are prone to multiple biases. When choosing an elicitation format, it is important to first consider the purpose and use of the data. Each elicitation method has strengths and weaknesses and can be used for different purposes in technology assessment.

Coordination and bargaining power in contracting with externalities

Building on Genicot and Ray [G. Genicot, D. Ray, Contracts and externalities: How things fall apart, J. Econ. Theory 131 (2006) 71–100] we develop a model of non-cooperative bargaining that combines the two main approaches in the literature of contracting with externalities: the offer game (in which the principal makes simultaneous offers to the agents) and the bidding game (in which the agents make simultaneous offers to the principal). Allowing for agent coordination, we show that the outcome of our bargaining procedure may differ remarkably from those of the offer and the bidding games. In particular, we find that bargaining can break agents' coordination and that the principal's payoff can be decreasing in his own bargaining power.

Vote Buying: General Elections

We examine the consequences of vote buying, assuming this practice were allowed and free of stigma. Two parties compete in a binary election and may purchase votes in a sequential bidding game via up‐front binding payments and/or campaign promises (platforms) that are contingent on the outcome of the election. We analyze the role of the parties’ and voters’ preferences in determining the winner and the payments to voters.