Valuations Of Bidders Research Articles

Properties of bundle valuations in carrier collaboration

Combinatorial auctions are an important part of many frameworks for carrier collaboration in logistics. In the last years, many innovative auction mechanisms have been developed in the economic literature that could potentially be applied in this context and that could significantly simplify the process of determining efficient allocations of requests. These mechanisms rely on certain assumptions about the valuations of bidders. In this paper, we perform computational experiments to analyze to which extent these requirements are fulfilled for valuations derived from a simple logistics problem, the Traveling Salesman Problem. We find that bidders’ valuations typically violate even very elementary requirements, but that these violations affect only a limited number of request bundles. We further analyze whether these violations exhibit a consistent pattern across multiple carriers and check consistency if route lengths are calculated exactly or approximated.

Robust bidding and revenue in descending price auctions

We study the properties of Dutch auctions in an independent private value setting, where bidders face uncertainty over the type distribution of their opponents and evaluate their payoffs by the worst case from a set of probabilistic scenarios. In contrast to static auction formats, participants in the Dutch auction gradually learn about the valuations of other bidders. We show that the transmitted information can lead to changes in the worst-case distribution and thereby shift a bidder's payoff maximizing exit price over time. We characterise the equilibrium bidding function in this environment and show that the arriving information leads bidders to exit earlier at higher prices. As a result, the Dutch auction systematically generates more revenue than the first-price auction.

Information disclosure by a seller in sequential first-price auctions

I study sequential first-price auctions where two items are sold to two bidders with private binary valuations. A seller, prior to the second auction, can publicly disclose some information about the outcome of the first auction. I characterize equilibrium strategies for various disclosure rules when the valuations of bidders are either perfectly positively or perfectly negatively correlated across items. I establish outcome equivalence between different disclosure rules. I find that it is optimal for the seller to disclose some information when the valuations are negatively correlated, whereas it is optimal not to disclose any information when the valuations are positively correlated. For most of the parameter values, the seller’s expected revenue is higher if the losing bid is disclosed. When only the winner’s identity is disclosed, the equilibrium is efficient whether the valuations are positively or negatively correlated.

Identification and estimation of discriminatory auctions when bidders have private values and singleton demand

This note shows how to identify and estimate the distribution of valuations of bidders participating in discriminatory auctions when valuations are private and bidders have singleton demand.

Strategic and Financial Bidders in Takeover Auctions

ABSTRACTUsing data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature, poorly performing companies. We also find that (i) valuations of different strategic bidders are more dispersed and (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies.

The number of active bidders in internet auctions

Internet auctions attract numerous agents, but only a few become active bidders. Under the Independent Private Values Paradigm the valuations of the active bidders form a specific record sequence. This record sequence implies that if the number n of potential bidders is large, the number of active bidders is approximately 2 log n , potentially explaining the relative inactivity. Moreover, if the arrival of potential bidders forms a non-homogeneous Poisson process due to a time preference for auctions that are soon to close, then the arrival process of the active bidders is approximately a Poisson arrival process.

Auctions with Anticipated Emotions: Overbidding, Underbidding, and Optimal Reserve Prices*

AbstractThe experimental literature has documented that there is overbidding in second‐price auctions, regardless of the valuations of bidders. In contrast, in first‐price auctions, there tends to be overbidding for large valuations, but underbidding for small valuations. We show that the experimental evidence can be rationalized by a simple extension of the standard auction model, where bidders anticipate (constant) positive or negative emotions caused by the mere fact of winning or losing. Even if the emotional (dis‐)utilities are very small, the revenue‐maximizing reserve price might be significantly different from the standard model. Moreover, decreases with the number of bidders.

Strategic and Financial Bidders in Takeover Auctions

Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature poorly-performing companies. We also find that (i) valuations of different strategic bidders are more dispersed, (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies.

An Estimable Demand System for a Large Auction Platform Market

We develop a demand system for a dynamic auction market with directed search. In each period, heterogeneous goods are exogenously supplied and sold by second price auction, and incumbent bidders choose which good to bid on and how much to bid. Bidder valuations are multidimensional, private and perfectly persistent, and the population of bidders evolves according to an exogenous entry and endogenous exit process. We prove that the state of the market | which includes active bidders' types and information sets | evolves as a geometrically ergodic Markov process. We characterize best responses as solutions to a partially observed Markov decision problem and provide conditions under which the econometrician can identify equilibrium strategies from time series data. We provide additional conditions under which this allows nonparametric identi cation of preferences. When the market is large so that each bidder's actions are informationally small, we show bidderwise identi cation: the valuations of bidders whose individual time series includes a bid on every product are identifi ed. Two-stage nonparametric and semiparametric estimation procedures are proposed, and shown to work well in Monte Carlo and counterfactual simulations.

The Extent of Internet Auction Markets

textabstractInternet auctions attract numerous agents, but only a few become active bidders. A major difficulty in the structural analysis of internet auctions is that the number of potential bidders is unknown. Under the independent private value paradigm (IPVP)the valuations of the active bidders form a specific record sequence. This record sequence implies that if the number n of potential bidders is large, the number of active bidders is approximately 2 log n, explaining the relative inactivity. Empirical evidence for the 2 log n rule is provided. This evidence can also be interpreted as a weak test of the IPVP.

Economic Announcements and the Timing of Public Debt Auctions

Most treasuries around the world sell their securities at auctions either directly or indirectly through an agent, usually the central bank. Although they can control both the rules and the timing of the auction, they may not be able to control the information and valuations of bidders. The purpose of this paper is to identify those economic indicators whose announcement is likely to have a significant impact on government securities prices and, hence, on bidders` behavior at auctions of government securities. This information could be used to schedule treasury securities auctions so as to minimize public debt management costs.

Economic Announcements and the Timing of Public Debt Auctions

Most treasuries around the world sell their securities at auctions either directly or indirectly through an agent, usually the central bank. Although they can control both the rules and the timing of the auction, they may not be able to control the information and valuations of bidders. The purpose of this paper is to identify those economic indicators whose announcement is likely to have a significant impact on government securities prices and, hence, on bidders’ behavior at auctions of government securities. This information could be used to schedule treasury securities auctions so as to minimize public debt management costs.

Continuity in auction design

J. Crémer and R. P. McLean (Econometrica56, 1988, 1247–1257) have shown that the auctioneer can extract all the surplus when the private valuations of bidders are not statistically independent. The paper shows that this result does not necessarily arise under limited liability or risk aversion. Under limited liability and/or risk aversion, we prove that the functions corresponding to the auctionner's optimal expected gain and to the maximum total surplus are continuous in the space of possible information distributions. Thus by continuity, the auctioneer wil not be able to extract all the rents when bidders' private valuations are approximately independent.