Dutch Auction Research Articles

A Dutch Auction Information Exchange

SOME organizational details of a style cut flower and potted plant auction suggest that bidders learn by observing prices. Price movements also suggest that learning, measured as a decline in the relative variation of prices paid for homogeneous goods, takes place while the auction proceeds. Five days each week during a few morning hours members of the United Flower Growers Cooperative assemble to trade under the rules of Dutch bidding. One grower, for example, may bring two hundred lots of eighteen-inch long-stem cut roses of a specified grade with six units per lot. These flowers roll through an arena where a few dozen bidders wait behind terraced rows of desks or tables, each desk equipped with a button used to signal a purchase order. Above the stream of flower carts and facing the bidders is a device, appearing like a clock, with a face more than a meter across. The single hand of this measures seller asking prices. The auction house sets the hand of this clock at an arbitrarily high price. The arm then swings rapidly to successively lower prices until someone pushes the button signaling a purchase.2 The bidder then indi-

Dutch Auction Rate Preferred Stock

Dutch Auction Rate Preferred Stock

Les marchés au cadran et la formation des prix

Dutch type auctions, used to sell fruits and vegetables, are special resources allocation procedures. In this article, we study the mechanism properties through the bidding theory methods. The Dutch auction is often preferred to other allocation procedures for several reasons: it's an efficient and very fast revelation mechanism, which is fair. A game theory analysis is used to study the Dutch auction prices properties. The decreasing auction is a non cooperative game which is strategically equivalent to the first priGe auction. The price formed, depending on the buyers' strategies, is a competitive price which tends to the true price when buyers become more risk averse and when competition increases.

A comparison of existing and alternative competitive bidding systems for indigent medical care

Competitive bidding is gaining in popularity as a means of containing costs in indigent medical care programs. The economic implications of the bidding systems employed by Arizona and California are discussed in light of the existing literature. Two alternative bidding approaches are proposed for consideration by policymakers—the sealed bid ‘Vickrey’ auction and the ‘ascending Dutch’ auction. While the incentives it contains for providers are not optimal, the ascending Dutch auction has the greatest potential for effective implementation since it accomodates the realities of public sector budget constraints and political pressures for direct control over program expenditures.

A test that discriminates between two models of the Dutch-first auction non-isomorphism

Previous experiments reject the hypothesis that the Dutch and first auctions are isomorphic. Two alternatives to the standard normal form analysis of the Dutch auction are formalized: (1) bidders violate Bayes' rule, (2) bidders experience a utility of suspense that is additive with the utility of monetary reward. Paired comparisons of bidding behavior between groups in which the treatment is to triple the payoff of the baseline group yields no significant effect of this treatment. We therefore reject the utility of suspense model.

Notes and news

Notes and news DUTCH AUCTION RECORDS The 1981-2 season was inaugurated by Van Gendt & Co. with a sale on 28- 30 September. Over 1600 lots came under the hammer, the vast majority of which fetched modest prices: in percentage terms, prices over f 1000 were rarities. The highest bid was f 8000, which was paid for 41 issues from the first five volumes of Neue Bildergallerie für die Jugend (Gotha 1828- 32): this was twice the estimate. A. Munting, Naauwkeurige beschryving der aardge- wassen (Leiden/Utrecht 1696) found a buyer at f 6200, compared with which the 19 volumes of

Dutch Auction Records

Dutch Auction Records

Dutch Auction Records 1979-80 (1)

Dutch Auction Records 1979-80 (1)

Dutch Auction Records

Dutch Auction Records

Dutch auction pricing

Dutch auction pricing

TREASURY BILL AUCTION PROCEDURES: COMMENT

IN THE JUNE issue of this Journal, Steven Bolten presents evidence on the profitability to the U.S. Treasury of selling its 3 months bills by competitive (so-called Dutch) auction rather than by the prevailing discriminatory auction system [1]. He concludes that replacing the discriminatory auction with the competitive auction would generate greater revenue for the Treasury.' In our opinion, Bolten's analysis justifies no such conclusion. Bolten estimates the demand schedule for Treasury bills under the current discriminatory auction procedure and simulates the revenue that would accrue to the Treasury under different assumptions about the increase in demand that might result from switching to a Dutch auction procedure. Under the current procedure, the Treasury sells most of each week's bill offering at prices that differ among the successful bidders with the Treasury acting as a discriminating monopolist. The lowest price (highest interest rate) at which any bills are awarded is the stopout price (stopout yield). Most investors will purchase their bills at a higher price. Small investors are permitted to submit limited bids guaranteed award at the average price paid by the competitive bidders. There are two reasons for believing that the demand schedule of competitive bids received by the Treasury under the current procedure may be somewhat lower than the schedule that would be received if all bills were awarded at the stopout price to participants bidding that price or higher. First, under the Dutch auction procedure, bidders would be motivated to specify prices that lie on their actual demand schedules rather than to expend resources to predict the outcome of the bidding in order to submit lower-priced bids a hair above the predicted stopout price. Second, relatively unsophisticated investors would be encouraged to submit bids to the Treasury directly rather than to rely on acquiring bills from dealers in the secondary market. If all awards are made at a single price, such investors needs not fear paying more than other bidders for bills issued in a given auction. Both effects should serve to shift upward the schedule of bids submitted.2 The implications of the two auctioning procedures are illustrated in Figure 1. The DD curve represents the schedule of competitive bids received under the existing discriminatory auction system. The total quantity of bills being auc

An Experimental Comparison of Pricing in Two Auction Systems

AbstractTrading and pricing procedures are being increasingly viewed as variables in the marketing system, particularly as the pricing role of central markets declines. Quantification of the effect of pricing systems on price outcome is needed for decisions in this area. English (ascending bid) and Dutch (descending price) auctions are compared in a series of experiments. Specific hypotheses regarding price variation, pattern of price during an auction period, and departure from equilibrium price are tested. The experimental evidence indicates the existence of a significant area of indeterminacy in pricing processes.

"Dutch Auction" and the 'O.E.D.'

"Dutch Auction" and the 'O.E.D.'