Results 1  10
of
86
Auction Theory: A Guide to the Literature
 JOURNAL OF ECONOMIC SURVEYS
, 1999
"... This paper provides an elementary, nontechnical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.), forthco ..."
Abstract

Cited by 529 (4 self)
 Add to MetaCart
This paper provides an elementary, nontechnical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.), forthcoming.) We begin with the most fundamental concepts, and then introduce the basic analysis of optimal auctions, the revenue equivalence theorem, and marginal revenues. Subsequent sections address riskaversion, affiliation, asymmetries, entry, collusion, multiunit auctions, double auctions, royalties, incentive contracts, and other topics. Appendices contain technical details, some simple worked examples, and a bibliography for each section.
Ascending Auctions with Package Bidding
, 2001
"... A benchmark "package auction" is introduced in which bidders may determine their own packages on which to bid. If all bidders bid straightforwardly, then the outcome is a point in the core of the exchange economy that minimizes the seller's revenue. When goods are substitutes, straigh ..."
Abstract

Cited by 151 (13 self)
 Add to MetaCart
A benchmark "package auction" is introduced in which bidders may determine their own packages on which to bid. If all bidders bid straightforwardly, then the outcome is a point in the core of the exchange economy that minimizes the seller's revenue. When goods are substitutes, straightforward bidding strategies comprise an ex post Nash equilibrium. Compared to the Vickrey auction, the benchmark ascending package auction has cheaper information processing, better handling of budget constraints, and less vulnerability to joint bidding strategies among bidders who would otherwise be losers. Improvements are suggested that speed the auction and limit opportunities for collusion.
Efficient Design with Interdependent Valuations

, 1996
"... We study efficient, BayesNash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satisfied. If signa ..."
Abstract

Cited by 125 (5 self)
 Add to MetaCart
We study efficient, BayesNash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satisfied. If signals are multidimensional, the congruence condition is determined by an integrability constraint, and it can hold only in nongeneric cases such as the private value case or the symmetric case. If signals are onedimensional, the congruence condition reduces to a monotonicity constraint and it can be generically satisfied. We apply the results to the study of multiobject auctions, and we discuss why such auctions cannot be reduced to onedimensional models without loss of generality.
How (Not) to Raise Money
 Journal of Political Economy
, 2005
"... We consider auctions used to raise money for a public good. We show that winnerpay auctions are inept fundraising mechanisms because of the positive externality bidders forgo if they top another’s high bid. Revenues are suppressed as a result and remain finite even when bidders value a dollar dona ..."
Abstract

Cited by 50 (4 self)
 Add to MetaCart
(Show Context)
We consider auctions used to raise money for a public good. We show that winnerpay auctions are inept fundraising mechanisms because of the positive externality bidders forgo if they top another’s high bid. Revenues are suppressed as a result and remain finite even when bidders value a dollar donated to the public good the same as a dollar kept. This problem does not occur in “allpay ” auctions where bidders have to pay irrespective of whether they win or lose. We prove that the (k + 1) thprice allpay auction revenue dominates the kthprice allpay auction, and that the amount raised increases when bidders derive more benefit from the public good. Keeping the auction format fixed, an increase in the number of bidders may decrease revenues as low bids start resembling voluntary contributions, causing lowvalue bidders to “free ride. ” Fundraisers may therefore benefit from restricting access to “a happy few. ” Finally, we investigate the fundraising properties of the dynamic nplayer “war of attrition.”
Auctions and Information Acquisition: Sealedbid or Dynamic Formats?
, 2002
"... Firms need to spend time and money to figure out how much assets for sale are worth to them. Which selling procedure is likely to generate better incentives for information acquisition? We show that multistage and in particular ascending price auctions with breaks (that allow for information acquis ..."
Abstract

Cited by 40 (0 self)
 Add to MetaCart
Firms need to spend time and money to figure out how much assets for sale are worth to them. Which selling procedure is likely to generate better incentives for information acquisition? We show that multistage and in particular ascending price auctions with breaks (that allow for information acquisition) perform better than their static counterpart. This is because dynamic formats allow bidders to observe the number of competitors left throughout the selling procedure, hence to get a much better estimate of their chance of winning. Since information acquisition tends to generate higher revenues, our analysis provides a new rationale for using dynamic formats rather than sealedbid ones. Our conclusion is reinforced when multiple objects are sold, because dynamic formats may not only provide bidders with estimates on whether competition is soft or not, but also on which object competition is softer.
Overcoming Adverse Selection: How Public Intervention Can Restore Market Functioning
, 2010
"... As illustrated by liquidity support, equity injections and asset repurchases in financial crises and by IMF credit lines to countries, authorities often intervene in order to revive markets that have dried up or to create new ones. In such situations, agents participate only if they receive from the ..."
Abstract

Cited by 34 (0 self)
 Add to MetaCart
As illustrated by liquidity support, equity injections and asset repurchases in financial crises and by IMF credit lines to countries, authorities often intervene in order to revive markets that have dried up or to create new ones. In such situations, agents participate only if they receive from the governmental scheme more than in the marketplace, while the market outcome depends on who joins the scheme. The paper provides a first analysis of market jumpstarting and its twoway interaction between mechanism design and participation constraints. In the model, sellers in need of cash have private information about the value of their legacy asset. The absence of buyer confidence forces authorities to intervene to jumpstart the market. We characterize the optimal intervention, and draw two main implications. First, the government should clean up the market, through buybacks of the weakest assets and then through some equity injections, and leave the agents with the strongest legacy assets to the market. In particular, authorities should not substitute fully for the market, even when they have no comparative disadvantage in acquiring assets or shares thereof. Second, the government creates its own competition by cleaning up the market from its most toxic pieces. At the optimal intervention the government always strictly overpays for the legacy asset. Yet, and unlike what would be suggested by Coasian profit evasion, the existence of a later market imposes no welfare cost. While it is cast in a public intervention context, the analysis of mechanismdependent reservation utilities also admits important private sector applications.
Externalities in online advertising
 In International World Wide Web Conference (WWW
, 2008
"... Most models for online advertising assume that an advertiser’s value from winning an ad auction, which depends on the clickthrough rate or conversion rate of the advertisement, is independent of other advertisements served alongside it in the same session. This ignores an important externality effec ..."
Abstract

Cited by 26 (2 self)
 Add to MetaCart
(Show Context)
Most models for online advertising assume that an advertiser’s value from winning an ad auction, which depends on the clickthrough rate or conversion rate of the advertisement, is independent of other advertisements served alongside it in the same session. This ignores an important externality effect: as the advertising audience has a limited attention span, a highquality ad on a page can detract attention from other ads on the same page. That is, the utility to a winner in such an auction also depends on the set of other winners. In this paper, we introduce the problem of modeling externalities in online advertising, and study the winner determination problem in these models. Our models are based on choice models on the audience side. We show that in the most general case, the winner determination problem is hard even to approximate. However, we give an approximation algorithm for this problem with an approximation factor that is logarithmic in the ratio of the maximum to the minimum bid. Furthermore, we show that there are some interesting special cases, such as the case where the audience preferences are single peaked, where the problem can be solved exactly in polynomial time. For all these algorithms, we prove that the winner determination algorithm can be combined with VCGstyle payments to yield truthful mechanisms.
Prices and the winner’s curse
 RAND Journal of Economics
, 1999
"... We usually assume that increases in supply, allocation by rationing, and exclusion of potential buyers reduce prices. But all these activities raise the expected price in an important set of cases when commonvalue assets are sold. Furthermore, when we make the assumptions needed to rule out these “ ..."
Abstract

Cited by 24 (3 self)
 Add to MetaCart
We usually assume that increases in supply, allocation by rationing, and exclusion of potential buyers reduce prices. But all these activities raise the expected price in an important set of cases when commonvalue assets are sold. Furthermore, when we make the assumptions needed to rule out these “anomalies ” for symmetric buyers, small asymmetries among the buyers necessarily cause the anomalies to reappear. Our results help explain rationing in initial public offerings and outcomes of spectrum auctions. We illustrate our results in the “Wallet Game ” and in another new game we introduce, the “Maximum Game.” 1.
Privatization and foreign competition
 Journal of International Economics
, 2004
"... This paper determines the equilibrium market structure in a mixed international oligopoly, where the state assets are sold at an auction. The model suggests that low greenÞeld costs and low trade costs induce foreign acquisitions. The intuition is that domestic Þrms can then not prevent foreign Þr ..."
Abstract

Cited by 18 (0 self)
 Add to MetaCart
This paper determines the equilibrium market structure in a mixed international oligopoly, where the state assets are sold at an auction. The model suggests that low greenÞeld costs and low trade costs induce foreign acquisitions. The intuition is that domestic Þrms can then not prevent foreign Þrms from becoming strong competitors and thus, their willingness to pay for the state assets is low. We also Þnd that proÞt shifting from domestic to foreign Þrms generated by National Treatments clauses is partly paid for by the foreign investor in the bidding competition over the state assets.
Moldovanu: ”E¢cient Design with Interdependent Valuations”, discussion paper, Northwestern University,1998, forthcoming in Econometrica
"... We study e¢cient, BayesNash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satis…ed. If signals ..."
Abstract

Cited by 14 (5 self)
 Add to MetaCart
We study e¢cient, BayesNash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satis…ed. If signals are multidimensional, the congruence condition is determined by an integrability constraint, and it can hold only in nongeneric cases where values are private or a certain symmetry assumption holds. If signals are onedimensional, the congruence condition reduces to a monotonicity constraint and it can be generically satis…ed. We apply the results to the study of multiobject auctions, and we discuss why such auctions cannot be reduced to onedimensional models without loss of generality. 1.