Auctions with external incentives: Experimental evidence

Date: 2016
By: Miguel A. Fonseca (Department of Economics, University of Exeter)
Francesco Giovannoni (Department of Economics, CSE and CMPO, University of Bristol)
Miltiadis Makris (Department of Economics, University of Southampton)
URL: http://d.repec.org/n?u=RePEc:exe:wpaper:1602&r=net
We consider auctions where bidders have external incentives and focus on the case where their valuations in the auction are positively correlated with their productivity which matters in a second stage job market. We study how this affects bidding behavior and wages in the job market and proceed to test the model’s implication in an experiment where treatments differ according to which bids are disclosed. Our results broadly confirm the theoretical prediction that bidders tend to overbid, and their bidding behavior and wages are influenced by the disclosure rule. The data also suggests that the dispersion in worker wages is affected by the disclosure rule, suggesting the importance of reputational bidding.
Keywords: Auctions, signaling, disclosure, experiments.
JEL: C92 D44 D82
廣告

The advantage of resource queues over spot resource markets: decision coordination in experiments under resource uncertainty

Fonseca, Miguel A., Alexander Pfaff, and Daniel Osgood. “The advantage of resource queues over spot resource markets: decision coordination in experiments under resource uncertainty." American Journal of Agricultural Economics 94.5 (2012): 1136-1153. [oxfordjournals.org]; [Open Access PDF]

==Notes by yinung==

本文用實驗法探討灌溉水源 (以 water queues 的形式) 的事前分配 (用 bidding) vs 事後水源拍賣,對生產決策 (種高/低水量需求作物) 之影響。以2007-08 英國 Exeter 大學學生和巴西農業區半工半讀的學生或公務員為受試者,實驗結果證明,事前的 water queues 制度,相對於事後的 spot market 分配水源的制度,有助於提昇效率。
其原因主要是在,決策者面對 environmental and strategic 兩種不確定之下, 可以利用先知道對手對環境不確定之選擇,用來當做生產決策協調之依據。
[引文] The advantage of resource queues over spot markets concerns two types of uncertainty, environmental and strategic.
(較早寫的)
此篇用經濟實驗法, 研究農民在灌溉用水不確定下之決策; 投入種子、肥料、整地的成本, 但利潤取決於不確定供水。在環境不確定 (雨量多寡) 前,先以 bidding (water queues) 決定用水優先序,可做為投入種植決策之協調機制,使得在事前 water queues 制度下, 比雨量確定後才拍賣決定水權制度更有效率。

==abstract==

Farmers have to make key decisions, such as which crops to plant or whether to prepare the soil, before knowing how much water they will get. They face losses if they make costly decisions but do not receive water, and they may forego profits if they receive water without being prepared. We consider the coordination of farmers’ decisions, such as which crops to plant or whether to prepare the soil when farmers must divide an uncertain water supply. We compare ex-ante queues (pre-decision) to
an ex-post spot market (post-decision & post-rain) in experiments in rural Brazil and a university in England. Queues have greater coordination success than does the spot market.

==References==

Lefebvre, M., L. Gangadharan, and S. Thoyer. 2012. “Do Security-Differentiated Water Rights Improve the Performance of Markets?” American Journal of Agricultural Economics. doi:10.1093/ajae/aas060.
本文回顧到這篇:
The most relevant experiment of which we are aware is that of Lefebvre et al. (2012), which studies profits with security-differentiated water rights (mimicking the essence of a queue) versus non-differentiated, equal share rights. The differentiated rights are seen to have profit and risk-management benefits relative to the non-differentiated rights.

Consumer Price Search and Platform Design in Internet Commerce

==noted by yinung==
這個網站搜尋、比價的主題很久了, 但仍是有趣, 也是有人用 law of one price 的觀念來看, 但裡頭的實驗怎麼做, 再了解。
Date: 2014-08
By: Michael Dinerstein
Liran Einav
Jonathan Levin
Neel Sundaresan
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20415&r=net
Search frictions can explain why the “law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer search and price competition when retailers offer homogeneous goods. We find that retail margins are on the order of 10%, and use the model to analyze the design of search rankings. Our model explains most of the effects of a major re-design of eBay’s product search, and allows us to identify conditions where narrowing consumer choice sets can be pro-competitive. Finally, we examine a subsequent A/B experiment run by eBay that illustrates the greater difficulties in designing search algorithms for differentiated products, where price is only one of the relevant product attributes.
JEL: D12 D22 D83 L13 L86

Car License Auction: Theory and Experimental Evidence

Date: 2014-09-02
By: Lijia Tan (The Wang Yanan Institute for Studies in Economics and MOE Key Laboratory in Econometrics, Xiamen University)
Lijia Wei (School of Economics and Management, Wuhan University)
URL: http://d.repec.org/n?u=RePEc:fee:wpaper:1401&r=net
In Singapore and many Chinese cities, tens of thousands of people participate in car license auctions each month. In a car license auction, many car licenses are sold but each participant can only bid for one license. We examine the theoretical properties of three auction formats: Shanghai auction, Guangzhou auction, and Singapore auction. Our main results are that (1) No equilibrium of the Shanghai auction can guarantee an efficient allocation, (2) the Singapore auction allocates objects efficiently if and only if a unique market clearing price does not exist, and (3) the Guangzhou auction is efficient if bidders are symmetric. The experimental evidence confirms our theoretical prediction. Our experiment also shows that the learning effects over time are quite different among these auction formats.
Keywords: Auction; Car License; Laboratory Experiment
JEL: C92 D02 D04 D44

Efficient Competition through Cheap Talk: Competing Auctions and Competitive Search without Ex Ante Price

Date: 2013
By: Kircher, Philipp
Kim, Kyungmin
URL: http://d.repec.org/n?u=RePEc:edn:sirdps:532&r=net
We consider a frictional two-sided matching market in which one side uses public cheap talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is efficient, constrained only by search frictions. We also show that the performance of an alternative trading protocol in the cheap-talk environment depends on the level of price dispersion generated by the protocol: If a trading protocol compresses (spreads) the distribution of prices relative to the first-price auction, then an efficient fully revealing equilibrium always (never) exists. Our results identify the settings in which cheap talk can serve as an efficient competitive instrument, in the sense that the central insights from the literature on competing auctions and competitive search continue to hold unaltered even without ex ante price commitment.
Keywords: Directed search, competitive search, commitment, cheap talk,

The Market for Paintings in Paris between Rococò and Romanticism

Date: 2014
By: Federico Etro (Department of Economics, University Of Venice Cà Foscari)
Elena Stepanova (Sant’Anna School of Advanced Studies, Pisa)
URL: http://d.repec.org/n?u=RePEc:ven:wpaper:2014:08&r=net
We analyze organization of auctions and bidding strategies with a unique dataset on Paris auctions between 700s and 800s. Prices reflect the objective features of the paintings and of the sale, and they reveal a substantial death effect, with upward jumps in the years after the death of the artists. Both the hedonic and repeated sale price indexes show a declining pattern for the relative price of paintings starting with the French Revolution. On this basis we analyze the emerging role and market power of art dealers and employ network theory to study whether they created rings to manipulate the outcome of the auctions for their profits. Dealers appear to have been divided into four main communities heavily trading between themselves and we find evidence of collusive behavior with lower hammer prices for buyers belonging to the same community of the dealers organizing the auction.
Keywords: Art market, Hedonic prices, Repeated sales price index, Network theory.
JEL: Z11 N0 D4

Auction Format and Auction Sequence in Multi-Item Multi-Unit Auctions – An experimental study

Date: 2014-06
By: Regina Betz (Australian School of Business, the University of New South Wales)
Ben Greiner (School of Economics, Australian School of Business, the University of New South Wales)
Sascha Schweitzer (University of Bayreuth)
Stefan Seifert (University of Bayreuth)
URL: http://d.repec.org/n?u=RePEc:swe:wpaper:2014-31&r=net
We experimentally study the effect of auction format (sealed-bid vs. closed clock vs. open clock) and auction sequence (simultaneous vs. sequential) on bidding behaviour and auction outcomes in auctions of multiple related multi-unit items. Prominent field applications are the sale of emission permits, fishing rights, and electricity. We find that, when auctioning simultaneously, clock auctions outperform sealed-bid auctions in terms of efficiency and revenues. This advantage disappears when the items are auctioned sequentially. In addition, auctioning sequentially has positive effects on total revenues across all auction formats, resulting from fiercer competition on the item auctioned first.
Keywords: emission permits, auction design, laboratory experiment
JEL: C90 D44 Q53

An experimental study of sorting in group contests

YNY: 這是一篇比較 group 之組成成員能力不同下, 所形成 overbidding 的實驗文獻。

Date: 2014-01
By: Philip Brookins (Department of Economics, Florida State University)
John Lightle (Department of Economics, Florida State University)
Dmitry Ryvkin (Department of Economics, Florida State University)
URL: http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2014_01_01&r=net
We study experimentally the effects of sorting in contests between groups of heterogeneous players whose within-group efforts are perfect substitutes. The theory predicts that higher aggregate effort will be reached when variation in ability between groups is lower, i.e., by a more balanced sorting. In the experiment, we assign subjects to four types — A, B, C, and D — ranked by their cost of effort, with A having the lowest and D having the highest cost, and conduct contests between two groups of two players each. In the Balanced treatment, (A,D) groups (i.e., groups comprised of a type A and a type D player) compete with (B,C) groups, whereas in the Unbalanced treatment, (A,B) groups compete with (C,D) groups. We find substantial heterogeneity and overinvestment of efforts by all types in both treatments, including the “underdog" (C,D) group which surprisingly is not demoralized by the unbalanced matching. Despite strong overbidding, relative aggregate efforts are remarkably close to equilibrium predictions both between treatments and between groups within each treatment. The results confirm the prediction that balanced sorting leads to higher aggregate effort.
Keywords: contest, group, sorting, heterogeneous players, experiment
JEL: C72 C91 M54 D72

The Intellectual Property Marketplace: Emerging Transaction and Investment Vehicles*

Malackowski, J. E., Cardoza, K., Gray, C., & Conroy, R. (2007). The Intellectual Property Marketplace: Emerging Transaction and Investment Vehicles. Licensing Journal, 27(2), 1-11. **

==notes by yinung==

p. 9 提到以證券交易的概念來「發行IP」,以專業評估決定發行「授權數量」(例如100 million units over
five years),然後 IP 擁有的公司再決定釋出多少授權數目, 每個授權(例如 70 million units at three cents a unit),由市場進行交易

IP 交易係由  or litigation 之壓力下所形成; 其交易成本很大,交易完成時間需 6-18 個月

… the historic IP marketplace, there are a number of key conclusions. First, the market was primarily motivated by the threat of patent enforcement or litigation. Second, there were very high transaction costs associated with transferring IP rights. .. it often takes 6 to 18 months to complete a deal, and this comes at significant costs.

第一次 Ocean Tomo 的 IP auction in San Francisco, April 2006.

1200 patent 中有 430 項列入拍賣,分成 78 lots, 400 人出席,交易金額 8.5 m 美元; 44 % 成交 (一般汽車拍賣成交率約 1/3 ` 1/2),此外還有 off the floor 交易

第二次 auction 成交金額 2.39 m

Should I sell or should I license 賣斷還是授權?

===引文===

over the last 30 years the labor and industrial economy has been supplanted by the knowledge economy.

無形資產的重要性

In 1975, more than 80 percent of the US market’s value was composed of tangible assets: factories, machines, and inventory. Now in 2006, less then 20 percent of the market’s value is composed of tangible assets, with the 80 percent balance associated with intangible assets.

Ocean Tomo 300 指數 in 2006

On September 13, 2006, Ocean Tomo launched the Ocean Tomo 300™ Patent Index—the first equity index based on the value of corporate IP.

… First published on May 26, 1896, the Dow Jones Industrial Average (DJIA), created by Wall Street Journal editor and Dow Jones & Company founder Charles Dow, represented the average of 12 stocks from various important US industries. … Nasdaq began trading on February 8, 1971
… On March 4, 1957, a broad, real-time stock market index, the Standard & Poor’s 500 (S&P 500) was introduced.

==一些名詞==

patent enforcement

patent trolls

(refer to them more appropriately as Patent Licensing and Enforcement Companies or “P-LECs”)

==參考網站==

Does Market Experience Eliminate Market Anomalies?*

List, John A. 2003. “Does Market Experience Eliminate Market Anomalies?” Quarterly Journal of Economics 118 (1): 41–71.

==notes by yinung==

主要結論有三

First, consistent with previous studies, I observe a significant endowment effect in the pooled data.

Second, I find sharp evidence that suggests market experience matters: across all consumer types, marketlike experience and the magnitude of the endowment effect are inversely related.

In addition, within the group of subjects who have intense trading experience (dealers and experienced
nondealers), I find that the endowment effect becomes negligible. Both of these observations extend quite well to statements of value in auctions, where offers and bids are significantly different for naive consumers, but statistically indistinguishable for experienced consumers.

===無母數統計: Fisher exact test===

R 的 vcd package 可以進行此檢定, see https://sites.google.com/site/rlearningsite/analysis/catagory/twoway

==Original Abstract==

This study examines individual behavior in two well-functioning marketplaces to investigate whether market experience eliminates the endowment effect. Field evidence from both markets suggests that individual behavior converges to the neoclassical prediction as market experience increases. In an experimental test of whether these observations are due to treatment (market experience) or selection (e.g., static preferences), I find that market experience plays a significant role in eliminating the endowment effect. I also find that these results are robust to institutional change and extend beyond the two marketplaces studied. Overall, this study provides strong evidence that market experience eliminates an important market anomaly.