Single Auction Research Articles

Szent György Czéh Magyar Amatőrök és Gyűjtők Egyesülete (1909–1923). Egy sajátos magyar műgyűjtő és műtárgyközvetítő szervezet a 20. század elején

Abstract The auctions held yearly four or five times under the aegis of the society ensured monopoly for the Saint George Guild for many years owing to the special legal regulations. The economic processes during World War I put an end to this favourable situation by 1917 when several rich auctioneers appeared who went into business – on the West European model – instead of remaining within the frames of a society. The auction-house of the Ernst Museum that was active for decades had larger turnover in a single auction than the Guild had in a whole year. The society that was financially pushed into the background was hindered by the lost war and the 1919 half-year communist power that radically changed the social and economic situation. From 1920 an auction or two were still announced, but ever rarer and in 1923 it stopped this activity. By then the Saint George Guild had fulfilled its function: regular art auctions were institutionalized, art collection and art trade had now consolidated frames that alre...

Optimizing revenue for bandwidth auctions over networks with time reservations

This paper concerns the problem of allocating network capacity through periodic auctions, in which users submit bids for fixed amounts of end-to-end service. We seek a distributed allocation policy over a general network topology that optimizes revenue for the operator, under the provision that resources allocated in a given auction are reserved for the entire duration of the connection. We first study periodic auctions under reservations for a single resource, modeling the optimal revenue problem as a Markov decision process (MDP), and developing a receding horizon approximation to its solution. Next, we consider the distributed allocation of a single auction over a general network, writing it as an integer program and studying its convex relaxation; techniques of proximal optimization are applied to obtain a convergent algorithm. Combining the two approaches we formulate a receding horizon optimization of revenue over a general network topology, leading to a convex program with a distributed solution. The solution is also generalized to the multipath case, where many routes are available for each end-to-end service. A simulation framework is implemented to illustrate the performance of the proposal, and representative examples are shown.

An agent-based English auction protocol using Elliptic Curve Cryptosystem for mobile commerce

Rapid development of the Internet and the extensive use of mobile phones have increased demand for mobile devices in Internet auctions. This trend is acting as an incentive to develop an auction model for mobile-based environment. Recently, Kuo-Hsuan Huang proposed a mobile auction agent model (MoAAM), which allows the bidders to participate in online auctions through a mobile agent. He used modular exponentiation operations in his method. As a result, the processing time for key generation, bidding, and verification were long. Thus, we propose to add the concept of Elliptic Curve Cryptosystem (ECC) onto MoAAM, because ECC has low computation amount and small key size, both of which will aid to increase the speed in generating keys, bidding, and verification. In terms of reduction of computation load on mobile devices and auction-manager server, the proposed method will make online auction system more efficient as well as more convenient to use. This paper mainly uses the English auction protocol as the key auction protocol. The protocol consists of four entities: Registration Manager (RM), Agent House (AH), Auction House (AUH), and Bidders (B). The Registration Manager registers and verifies Bidder identity. The Agent House manages the agents and assigns public transaction keys to Bidders. The Auction House provides a place for auction and maintains all necessary operations for a smooth online auction. Bidders are buyers who are interested in purchasing items at the auction. Our proposed method conforms to the requirements of an online auction protocol in terms of anonymity, traceability, no framing, unforgetability, non-repudiation, fairness, public verifiability, unlinkability among various auction rounds, linkability within a single auction round, efficiency of bidding, one-time registration, and easy revocation.

Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions

A growing number of vendors are using a sequence of online auctions to sell large inventories of identical items. Although bidding strategies and bidder behavior in single auctions have been extensively studied, limited research exists on bidding in sequential auctions. We seek to explain how bidders in such an environment learn from the information, and form and update their willingness to pay (WTP). Using a large data set from an online auction retailer, we analyze the evolution of the bidders' WTP as well as the effect of auction design on bidders' WTP in sequential auctions. We see our study in the context of a longitudinal field experiment, in which we were able to track actions of repeat bidders over an extended period of time. Our results show that bidders' WTP in sequential auctions can be explained from their demand characteristics, their participation experience in previous auctions, outcomes in previous auctions, and auction design parameters. We also observe, characterize, and measure what we call a modified demand reduction effect exhibited across different auctions, over time, by multiunit demand bidders. Our findings are important to enable better auction mechanism design, and more sophisticated bidding tools that explore the rich information environment of sequential auctions.

Why Did Auction Rate Bond Auctions Fail during 2007–2008?

The auction rate bond market grew from inauspicious beginnings in 1985 to representing a significant fraction of the municipal bond market in 2007, with a total of 603 issuances raising more than $35 billion in capital. Since March of 2008 not a single auction rate bond has been issued. The last issuance coincided with a wave of “failures” of auction rate bond auctions during the early winter of 2008. Pundits have attributed the auction failures to a “frozen” market and hint that irrationality on the part of investors precipitated the auction failures. Missing from the headlines is that all auction rate bonds have interest rate caps that limit their yields. The authors find that, contrary to the impression given by news headlines, not all auctions failed and that investors rationally discriminated among bonds such that it was primarily those with low caps that experienced high failure rates. They further conclude that, in the absence of such caps, few if any auctions would have failed.

Simultaneous vs. sequential sales: Bidder competition and supply uncertainty

Under what circumstances will a seller be better off selling the inventory sequentially, rather than selling it all in a single auction? Does it benefit the seller to reveal how many auctions there will be? We study a uniform-price auction, in which bidders demand no more than one item, and have independent, private values. We show that even (1) when all buyers are present at the beginning of the auction, and (2) when both the seller and the buyers are impatient, a sequential sale can still benefit the seller as it stimulates competition among forward-looking bidders. This result depends on: (1) the bidder competition intensity, which is characterized by the difference between the number of items available and the number of buyers; and (2) the impatience levels of the auctioneer and the bidders. We also show that when there is uncertainty about the quantity supplied, a high-inventory auctioneer may benefit from using sequential auctions by pretending to be a low-inventory one initially.

A self-* auction server: design principles, architecture and implementation

The use of economic models to handle resource allocation in the grid is a reality. Auction mechanisms are used in grid and distributed testbeds to elicitate user's preferences while improving the performance of the system. Existing implementations rely on single auction mechanisms to allocate resources whilst grids are heterogeneous in nature. Many different applications cohabitate having different workflow requirements such as bag of tasks executions or real time interaction that cannot be dealt efficiently by a single mechanism. In that scenario it would be more realistic to allocate resources using the most suitable mechanism for each situation, enabling also its configuration, deployment and management at runtime. Therefore, the paper presents the design principles, architecture and implementation of a configurable auction server (CAS). The auction server offers support for the deployment, configuration and execution of different auction mechanisms, facilitating the task of market mechanism developers and enabling the execution of distributed marketplaces according to local demand.

Solving Truckload Procurement Auctions Over an Exponential Number of Bundles

Truckload carriers provide hundreds of billions of dollars worth of services to shippers in the United States alone each year. Internet auctions provide these shippers with a fast and easy way to negotiate potential contracts with a large number of carriers. Combinatorial auctions have the added benefit of allowing multiple lanes to be considered simultaneously in a single auction. This is important because it enables carriers to connect multiple lanes in continuous moves or tours, decreasing the empty mileage that must be driven, and therefore increasing overall efficiency. On the other hand, combinatorial auctions require bidding on an exponential number of bundles to achieve full economies of scope and scale, which is not tractable except for very small auctions. In most real-world auctions, bidding is instead typically limited to a very small subset of the potential bids. We present an implicit bidding approach to combinatorial auctions for truckload procurement that enables the complete set of all possible bids to be considered implicitly, without placing the corresponding burden of an exponential number of bids on the bidders or the auctioneer. We present the models needed to solve this problem. We then provide extensive computational results to demonstrate the tractability of our approach. Finally, we conclude with numerical analysis to assess the quality of the solutions that are generated and to demonstrate the benefits of our approach over existing bidding methods in practice.

Bidding behavior in dynamic auction settings: An empirical analysis of eBay

We study the impact of dynamic environment of eBay auctions on bidding behavior. Due to high-speed Internet and practically costless search possibilities, bidding behavior is no longer a function of characteristics of a single auction but depends on auctions running simultaneously, completed auctions, available Buy-It-Now prices as well as various outside options. We study how this dynamic market affects a bidder’s choice of participating in an auction or leaving eBay for an outside alternative. We analyze Texas Instruments (TI-83) Graphing Calculator auctions presented on eBay. We estimate a random-effects probit model to study bidders’ probability of staying in eBay, while controlling for unobservable individual-specific heterogeneity. Our main result shows that Market Tightness – the ratio of bidders to sellers – has a negative and significant effect on bidders’ decision to remain in eBay. Moreover, variables containing information from other eBay auctions significantly affect bidders’ participation decision, thus emphasizing the importance of the dynamic, multi-auction environment in eBay marketplace for potential buyers.

Analysis of single and networked auctions

Web-based computerized auctions are increasingly present in the Internet. We can imagine that in the future this trend will actually be extended to situations where virtual buyer and seller agents will conduct automated transactions across the network, and that large sectors of the economy may be strucured in this manner. The purpose of this article is to model automated bidders and sellers which interact through a network. We model the bidding process as a random arrival process while the price attained by a good is modeled as a discrete random variable. We obtain analytical solutions allowing us to compute the income from a single auction, or the income per unit time from a repeated sequence of auctions. A variety of single-auction models are studied, including English and Vickrey auctions, and the income per unit time is derived as a function of other parameters, including the rate of arrival of bids, the seller's decision time, the value of the good, and the “rest time” of the seller between successive auctions. We illustrate the results via numerical examples. We also introduce a model for networked auctions where bidders can circulate among a set of interconnected auctions which we call the Mobile Bidder Model (MBM). We obtain an analytical solution for the MBM under the assumption,which we call the “active bidders assumption,” that activities that are internal to an auction (bids and sales) are much more frequent than changes that occur in the number of bidders at each auction.

Development of a syndromic surveillance system for detection of disease among livestock entering an auction market

To develop a syndromic surveillance system based on visual inspection from outside the livestock pens that could be used for detection of disease among livestock entering an auction market. Cross-sectional study. All livestock (beef and dairy cattle, sheep, goats, horses, and pigs) entering a single auction market in Colorado during 30 business days. Procedures-Livestock were enumerated and visually inspected for clinical signs of disease by a veterinarian outside the pens, and clinical signs that were observed were categorized into 12 disease syndromes. Frequency of clinical signs and disease syndromes was then calculated. Data were recorded for a total of 29,371 animal observation days. For all species combined, the most common disease syndrome was respiratory tract disease (218.9 observations/10,000 animal observation days), followed by thin body condition and abnormal ambulation or posture (80.7 and 27.2 observations/10,000 animal observation days, respectively). Together, these 3 disease syndromes accounted for 92.8% of all clinical signs of disease observed. The syndromes least commonly identified were non-injury-related hemorrhage, death, and injury-related hemorrhage (0.0, 0.3, and 0.7 observations/10,000 animal observation days, respectively). Results suggested that a syndromic surveillance system based on visual inspection alone could be developed to identify possible disease conditions among livestock at an auction market. Further studies are needed to determine the sensitivity and specificity of visual observation in detecting disease.

An options-based solution to the sequential auction problem

The sequential auction problem is commonplace in open, electronic marketplaces such as eBay. This is the problem where a buyer has no dominant strategy in bidding across multiple auctions when the buyer would have a simple, truth-revealing strategy if there was but a single auction event. Our model allows for multiple, distinct goods and market dynamics with buyers and sellers that arrive over time. Sellers each bring a single unit of a good to the market while buyers can have values on bundles of goods. We model each individual auction as a second-price (Vickrey) auction and propose an options-based, proxied solution to provide price and winner-determination coordination across auctions. While still allowing for temporally uncoordinated market participation, this options-based approach solves the sequential auction problem and provides truthful bidding as a weakly dominant strategy for buyers. An empirical study suggests that this coordination can enable a significant efficiency and revenue improvement over the current eBay market design, and highlights the effect on performance of complex buyer valuations (buyers with substitutes and complements valuations) and varying the market liquidity.

Prevalence of digital dermatitis in first lactation cows assessed at breeding cattle auctions

The prevalence of digital dermatitis (DD) in first lactation cows (FLCs) presented at 10 breeding cattle auctions was determined in a single auction centre in Austria over a period of 14 months. At each auction, FLCs were selected randomly for claw examination from the monthly auction catalogue. After obtaining owner consent, the hindclaws were examined in a walk-in crush. The type of lesion (M1-M4) and the diameter of DD lesions together with claw horn lesions and the trimming status of the claws were evaluated. From a total of 1110 FLCs registered for the ten auctions, 399 (36%) were randomly chosen for examination and 199 FLCs (17.9%) could be defined. In 63 cows (15.7%), the owners refused consent. A total of 24 FLCs were found to have DD lesions on one or both hindlimbs, resulting in a DD prevalence of 12.1%. The size of lesions ranged from 0.5-3 cm in diameter. No influence of environmental factors (such as season or housing) on the prevalence of DD could be found. In 30/199 (15.1%) of FLCs examined, claw horn lesions such as double sole, white line disease and sole ulcer were observed, but both claw horn and DD lesions were seen in only three cows. Potential buyers at auctions should be aware of both conditions, as the 12.1% prevalence of DD and the 15.1% prevalence of claw horn lesions in FLCs are considerable. Critical evaluation of claw health and DD is essential when purchasing breeding cattle.

Optimal bidding in online auctions

Online auctions are arguably one of the most important and distinctly new applications of the Internet. The predominant player in online auctions, eBay, has over 42 million users, and it was the host of over $9.3 billion worth of goods sold just in the year 2001. Using methods from approximate dynamic programming and integer programming, we design algorithms for optimally bidding for a single item in an online auction, and in simultaneous or overlapping multiple online auctions. We report computational evidence using data from eBay's website from 1772 completed auctions for personal digital assistants and from 4208 completed auctions for stamp collections that shows that (a) the optimal dynamic policy outperforms simple but widely used static heuristic rules for a single auction, and (b) a new approach for the multiple auctions problem that uses the value functions of single auctions found by dynamic programming in an integer programming framework produces high-quality solutions fast and reliably.

Impact of wind farm integration on electricity market prices

Wind generation is considered one of the most rapidly increasing resources among other distributed generation technologies. Recently, wind farms with considerable output power rating are installed. The variability of the wind output power, and the forecast inaccuracy could have an impact on electricity market prices. These issues have been addressed by developing a single auction market model to determine the close to real-time electricity market prices. The market-clearing price was determined by formulating an optimal power flow problem while considering different operational strategies. Inaccurate power prediction can result in either underestimated or overestimated market prices, which would lead to either savings to customers or additional revenue for generator suppliers.

Impact of wind generation control strategies, penetration level and installation location on electricity market prices

Integration of wind facilities into power system grids have several impact on power system related issues including; transmission congestion, optimum power flow, system stability, power quality, system economics and load dispatch. Consequently, wind farm control strategy, location across the distribution network and its penetration level could have an impact on electricity market prices. This paper addresses these issues, by developing a single auction market model. An optimal power flow problem was formulated for determining the close to real time electricity market-clearing price and the total cost of generation. Simulation results, considering different operational cases, are presented to highlight the impact.

Optimal Strategies for Simultaneous Vickrey Auctions with Perfect Substitutes

We derive optimal strategies for a bidding agent that participates in multiple, simultaneous second-price auctions with perfect substitutes. We prove that, if everyone else bids locally in a single auction, the global bidder should always place non-zero bids in all available auctions, provided there are no budget constraints. With a budget, however, the optimal strategy is to bid locally if this budget is equal or less than the valuation. Furthermore, for a wide range of valuation distributions, we prove that the problem of finding the optimal bids reduces to two dimensions if all auctions are identical. Finally, we address markets with both sequential and simultaneous auctions, non-identical auctions, and the allocative efficiency of the market.

Exploring local search in winner determination problem

In Combinatorial Auctions, multiple goods (items) are available for auction simultaneously, and bidders bid for combinations of goods called bundles. In the single unit combinatorial auction problem, there is only single unit of each item present and the items are considered to be indivisible. This forms the supply side constraint resulting in a need by the seller to decide on which bundles to allocate for maximizing the revenue. Determining these winning bundles is an NP-complete problem and is known by the name of Winner Determination Problem (WDP) in literature. Combinatorial auction mechanism has a wide range of practical applications such as allocation of railroads, auction of adjacent pieces of real estate, auction of airport landing slots, distributed job shop scheduling etc. The optimal heuristic search algorithms like CASS and CABOB proposed for solving the WDP take a lot of CPU time for solving large problem instances. Though these algorithms give optimal solutions, they would be useful only in scenarios where time is not at all a constraint, and the bidding is a one time affair. This poses a limitation in conducting combinatorial auctions with multiple rounds of bidding and hence hinders the widespread use of combinatorial auctions on the patterns of traditional English auction and internet auctions. Thus faster solution of WDP holds the key to widespread use and popularity of combinatorial auctions. This paper attempts to address the above issue, and proposes a simple local search technique LSWDP (Local Search for Winner Determination Problem) that runs very fast and provides solutions quite close to optimal for a number of applications. It also outputs optimal solutions in many instances taking only a fraction of the CPU time taken by CASS. In addition LSWDP was found to outperform the anytime algorithm CASS given a time cutoff. This paper also presents an enhancement called LSCN (Local Search using Complimentary Neighborhood) that provides still better solutions in terms of close to optimal behavior and achieves a much better strike rate in hitting optimal solutions. LSCN runs slower than LSWDP but still takes only a fraction of the CPU time taken by CASS thus encouraging the use of local search for combinatorial auctions. Finally, an extension to multi-partition search has been proposed and analyzed.

Creating competition out of thin air: An experimental study of right-to-choose auctions

This paper presents an experimental study of a mechanism that is commonly used to sell multiple heterogeneous goods. The novel feature of this procedure is that instead of selling each good in a separate auction, the seller executes a single auction in which buyers, who may be interested in completely different goods, compete for the right to choose a good. We provide experimental evidence that a Right-to-Choose (RTC) auction can generate more revenue than the theoretically optimal auction. Moreover, in contrast to the “optimal” auction, the RTC auction is approximately efficient in the sense that the surplus it generates is close to the maximal one. Furthermore, a seller who would like to retain some of his goods can generate more revenue with a restricted RTC auction in which not all rights-to-choose are sold, than with the theoretically optimal auction.

Bidder-anonymous English auction scheme with privacy and public verifiability

This work studies the English auction protocol, which comprises three interactive parties—the Registration Manager, the Auction Manager and the Bidder. The registration manager confirms and authenticates the identities of bidders; the auction manager issues the bidding rights and maintains order in holding the auction. The proposed scheme provides the following security features—anonymity, traceability, no framing, unforgeability, non-repudiation, fairness, public verifiability, non-linkability among various auction rounds, linkability within a single auction round, bidding efficiency, single registration, and easy revocation. The scheme developed herein can effectively reduce the load on the registration and auction managers by requiring the end server to derive the key. It also eliminates the need for bidders to download the auction key and the auction certificate. Hence, the time complexity of processing data is clearly reduced and the best interests of the bidders can be achieved. Accordingly, the scheme is consistent with the actual practice of online transactions.