2,645 research outputs found
An experimental study on sequential auctions with privately known capacities
No full textWe experimentally study sequential procurement auctions where bidders' capacity constraints are private information. Our experiment involves two first-price auctions with a belief elicitation stage at the end of the first. Our results show that (i) observed behavior in the second auction is overall consistent with sequential rationality; (ii) first auction bids are decreasing in the capacity of the bidder, but (iii) stated beliefs are inconsistent with the actual play. Hence, subjects seem to be aware of the opportunity cost of early bids (which leads capacity constrained bidders to bid more cautiously than unconstrained ones); on the other hand, since they do not recognize the informative content of bids, the potential signaling cost associated with early bids does not come into play
An Experimental Study on Sequential Auctions with Privately Known Capacities
No full textWe experimentally study bidding behavior in sequential first-price procurement auctions where bidders’ capacity constraints are private information. Treatment differs in the ex-ante probability distribution of sellers’ capacities and in the (exogenous) probability that the second auction is actually implemented. Our results show that: (i) bidding behavior in the second auction conforms with sequential rationality; (ii) while first auction’s bids negatively depend on capacity, bidders seem unable to recognize this link when, at the end of the first auction, they state their beliefs on the opponent’s capacity. To rationalize this inconsistency between bids and beliefs, we conjecture that bidding in the first auction is also affected by a hidden, behavioral type – related to the strategic sophistication of bidders – that obfuscates the link between capacity and bids. Building on this intuition, we show that a simple level-k model may help explain the inconsistency
Sophisticated Bidders in Beauty-Contest Auctions
No full textIn this paper, we study bidding behavior by firms in beauty-contest auctions, i.e. auctions in which the winning bid is the one which gets closest to some function (average) of all submitted bids. Using a dataset on public procurement beauty-contest auctions in Italy and exploiting a change in the auction format, we show that firms' observed biddin behavior departs from equilibrium and can be predicted by an index of sophistication, which captures the firms' accumulated capacity of bidding well (i.e. close to optimality) in the past. We show that our empirical evidence is consistent with a Cognitive Hierarchy model of bidders' behavior. We also investigate whether and how firms learn to think and bid strategically through experience
Bidding on price and quality: An experiment on the complexity of scoring rule auctions
No full textWe experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, efficiency and buyer's utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferabl
Allotment in first-price auctions: an experimental investigation
No full textWe experimentally study the effects of allotment - the division of an item into homogeneous units - in independent private value auctions. We compare a bundling first-price auction with two equivalent treatments where allotment is implemented: a two-unit discriminatory auction and two simultaneous single-unit first-price auctions. We find that allotment in the form of a discriminatory auction generates a loss of efficiency with respect to bundling. In the allotment treatments, we observe large and persistent bid spread, and the discriminatory auction is less efficient than simultaneous auctions. We provide a unified interpretation of our results that is based on both a non-equilibrium response to the coordination problem characterizing the simultaneous auction format and a general class of behavioral preferences that includes risk aversion, joy of winning and loser’s regret as specific cases
Il caso Seat Pagine Gialle/Cecchi Gori Communications: tutela della concorrenza ed incentivi all'innovazione nei mercati derivanti dalla convergenza
No full textDiscussion Paper 33/2002, Dipartimento di Scienze Economiche, Università di Padova
Multi-channel propagation simulator: a new tool for the design of complex satellite-based adaptive radio networks
No full textAllotment in First Price Auctions: An Experimental Investigation
No full textWe experimentally investigate the effects of allotment - the division of one item into several and distinct units - on bidding behaviour and efficiency in first-price, independent
private values auction formats. In particular, allotment is introduced by either implementing a single auction with two identical units (discriminatory auction) or by letting subjects
to participate to two identical and simultaneous auctions, each involving a single unit. We find that allotment mitigates overbidding, with this effect being more pronunced in the
discriminatory auction. Moreover, in the treatments with allotment, we observe a persistent and (relatively) large bid spread. Finally, because of bid spreading and the effects on
overbidding, we observe a signicant loss of efficiency in the discriminatory auction relative to the other two treatments
Who is the author of the 1876 Stefano manuscript?
No full textFor over one hundred years the Stefano manuscript was a private document in the possession of the Baccich family and descendants. It told a story of the 1875 Stefano shipwreck as narrated by the shipwreck survivor and the founding family patriarch Miho Baccich. In these circumstances the question of authorship of the manuscript was immaterial and did not arise as an issue. However, with the publication of the manuscript the author‟s name, or names, need to be formally attributed to it. It turns out that this is not such a clear-cut matter.
As we shall see, all informed sources attributed the authorship, and the ownership, of the manuscript to Miho Baccich. But the manuscript itself was written by Canon Stjepan Skurla – a priest from Miho‟s hometown of Dubrovnik. The question then arises: should Skurla also be considered as an author of the manuscript, or, even as the sole author (as some would have it)
BIDDING ON PRICE AND QUALITY: AN EXPERIMENT ON THE COMPLEXITY OF SCORING AUCTIONS
No full textWe run an experiment on procurement auctions in a setting where both quality and price matter. We compare two unidimensional treatments in which the buyer choses one dimension (quality or price) and sellers compete on the other, with three bidimensional treatments (with different strategy spaces) in which sellers submit a price-quality bid and the winner is determined by a score that linearly combines the two offers. We find that, with respect to the theoretical predictions, the bidimensional treatments significantly underperform, both in terms of effciency and buyer's utility. We attribute this result to the higher strategic complexity of these treatments and test this intuition by fitting a structural Quantal Response Equilibrium model with risk aversion to our experimental
data. We find very similar estimates for the risk aversion parameter across all treatments; instead, the error parameter, which captures deviations between the observed bids and the payoff-maximizing ones, is larger in the bidimensional treatments than in the unidimensional ones. Our evidence suggests that increasing the dimensionality and the size of the suppliers' strategy space increases their tendency to make suboptimal offers, thus undermining the theoretical superiority of more complex mechanisms
- …
