Strategic Implications of Uncertainty over One's Own Private Value in Auctions

Eric Bennett Rasmusen

doi:10.2202/1534-5963.1261

Strategic Implications of Uncertainty over One's Own Private Value in Auctions

Advances in Theoretical Economics ◽

10.2202/1534-5963.1261 ◽

2006 ◽

Vol 6 (1) ◽

Cited By ~ 21

Author(s):

Eric Bennett Rasmusen

Keyword(s):

Bidding Strategy ◽

Private Values ◽

The Cost ◽

Private Value

A rational bidder in a private-value auction should be reluctant to incur the cost of perfectly estimating his value if it might not matter to the success of his bidding strategy. This can explain sniping---flurries of bids at the end of auctions---as the result of other bidders trying to avoid stimulating the victim into learning more about his value. The idea of value discovery also explains why a bidder might increase his bid ceiling in the course of an auction and why he would like to know the private values of other bidders.

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Affiliation and Entry in First-Price Auctions with Heterogeneous Bidders: An Analysis of Merger Effects

American Economic Journal Microeconomics ◽

10.1257/mic.20110106 ◽

2015 ◽

Vol 7 (2) ◽

pp. 188-214 ◽

Cited By ~ 13

Author(s):

Tong Li ◽

Bingyu Zhang

Keyword(s):

Existence And Uniqueness ◽

Joint Distribution ◽

Structural Model ◽

Archimedean Copulas ◽

Auction Mechanism ◽

Private Values ◽

Timber Sale ◽

Private Value

We study the effects of mergers in timber sale auctions in Oregon. We propose an entry and bidding model within the affiliated private value (APV) framework and with heterogeneous bidders, and establish existence of the entry equilibrium and existence and uniqueness of the bidding equilibrium when the joint distribution of private values belongs to the class of Archimedean copulas. We estimate the resulting structural model, and study merger effects through counterfactual analyses using the structural estimates. We evaluate how merger effects depend on affiliation, entry, and the auction mechanism and find that the seller may benefit from some mergers. (JEL C57, D44, G34, L11, L73)

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Real and Private-Value Assets

Review of Financial Studies ◽

10.1093/rfs/hhab035 ◽

2021 ◽

Author(s):

William N Goetzmann ◽

Christophe Spaenjers ◽

Stijn Van Nieuwerburgh

Keyword(s):

Real Estate ◽

Financial Markets ◽

Special Issue ◽

Research Directions ◽

Private Values ◽

Sustainable Investments ◽

New Research ◽

Private Value ◽

Real Assets ◽

The U.S

Abstract Real and private-value assets—defined here as the sum of real estate, infrastructure, collectibles, and noncorporate business equity—compose an investment class worth an estimated $84 trillion in the U.S. alone. Furthermore, private values can affect pricing in many other financial markets, such as that for sustainable investments. This paper introduces the research on real assets and private values that can be found in this special issue. It also reviews recent advances and highlights new research directions on a number of topics in the real assets space that we believe to be particularly important and exciting.

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The Role of Confidence in Truthful Revelation of Private Values

Agricultural and Resource Economics Review ◽

10.1017/s1068280500004275 ◽

2014 ◽

Vol 43 (2) ◽

pp. 193-208

Author(s):

Gregory M. Parkhurst ◽

Clifford Nowell

Keyword(s):

Willingness To Pay ◽

Bidding Strategy ◽

Willingness To Accept ◽

Market Experience ◽

Private Values ◽

And Training

Recent research shows that disparities between willingness to pay (WTP) and willingness to accept (WTA) disappear with market experience and training. In effect, preferences can be refined by eliminating subjects’ misconceptions regarding elicitation procedures. We use a stated measure of confidence as a proxy for misconceptions and test the influence of confidence on truthful revelation of induced values in WTP and WTA auctions using the Becker-DeGroot-Marschak (BDM) mechanism. The results indicate that confidence matters for buyers and sellers. With confidence, WTA and WTP measures converge, and people with greater confidence choose the dominant bidding strategy more frequently.

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An Introduction of Evolutionary Computation in Auctions

Handbook of Research on Nature-Inspired Computing for Economics and Management ◽

10.4018/978-1-59140-984-7.ch050 ◽

2007 ◽

pp. 771-785

Author(s):

A. Mochon ◽

Y. Saez

Keyword(s):

Evolutionary Computation ◽

Optimal Strategies ◽

Auction Theory ◽

Drop Out ◽

Bidding Strategy ◽

Demand Curves ◽

Private Values ◽

Recent Method ◽

Ausubel Auction ◽

The Subject

The increasing use of auctions as a selling mechanism has led to a growing interest in the subject. Thus both auction theory and experimental examinations of these theories are being developed. A recent method used for carrying out research on auctions has been the design of computational simulations. The aim of this chapter is to give a background about auction theory and to present how evolutionary computation techniques can be applied to auctions. Besides, a complete review to the related literature is also made. Finally, an explained example shows how a genetic algorithm can help automatically find bidders’ optimal strategies for a specific dynamic multi-unit auction—the Ausubel auction—with private values, drop-out information, and with several rationing rules implemented. The method provides the bidding strategy (defined as the action to be taken under different auction conditions) that maximizes the bidder’s payoff. The algorithm is tested under several experimental environments that differ in the elasticity of their demand curves, number of bidders, and quantity of lots auctioned. The results suggest that the approach leads to strategies that outperform sincere bidding when rationing is needed.

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Online Second Price Auction with Semi-Bandit Feedback under the Non-Stationary Setting

Proceedings of the AAAI Conference on Artificial Intelligence ◽

10.1609/aaai.v34i04.6171 ◽

2020 ◽

Vol 34 (04) ◽

pp. 6893-6900

Author(s):

Zhao Haoyu ◽

Chen Wei

Keyword(s):

Time Horizon ◽

Joint Distribution ◽

Reserve Price ◽

Total Revenue ◽

Dynamic Case ◽

Private Values ◽

Price Auction ◽

Second Price Auction ◽

Private Value ◽

Over Time

In this paper, we study the non-stationary online second price auction problem. We assume that the seller is selling the same type of items in T rounds by the second price auction, and she can set the reserve price in each round. In each round, the bidders draw their private values from a joint distribution unknown to the seller. Then, the seller announced the reserve price in this round. Next, bidders with private values higher than the announced reserve price in that round will report their values to the seller as their bids. The bidder with the highest bid larger than the reserved price would win the item and she will pay to the seller the price equal to the second-highest bid or the reserve price, whichever is larger. The seller wants to maximize her total revenue during the time horizon T while learning the distribution of private values over time. The problem is more challenging than the standard online learning scenario since the private value distribution is non-stationary, meaning that the distribution of bidders' private values may change over time, and we need to use the non-stationary regret to measure the performance of our algorithm. To our knowledge, this paper is the first to study the repeated auction in the non-stationary setting theoretically. Our algorithm achieves the non-stationary regret upper bound Õ(min{√S T, V¯⅓T⅔), where S is the number of switches in the distribution, and V¯ is the sum of total variation, and S and V¯ are not needed to be known by the algorithm. We also prove regret lower bounds Ω(√S T) in the switching case and Ω(V¯⅓T⅔) in the dynamic case, showing that our algorithm has nearly optimal non-stationary regret.

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The IBM-PC in electron microscopy

Proceedings, annual meeting, Electron Microscopy Society of America ◽

10.1017/s0424820100165525 ◽

1996 ◽

Vol 54 ◽

pp. 612-613

Author(s):

James F. Mancuso

Keyword(s):

Head Start ◽

Image Acquisition ◽

Cost Effective ◽

Financial Applications ◽

Number Of Factors ◽

Instrument Control ◽

The Cost ◽

Training And Support ◽

Control Image ◽

Ibm Pc

IBM PC compatible computers are widely used in microscopy for applications ranging from control to image acquisition and analysis. The choice of IBM-PC based systems over competing computer platforms can be based on technical merit alone or on a number of factors relating to economics, availability of peripherals, management dictum, or simple personal preference.IBM-PC got a strong “head start” by first dominating clerical, document processing and financial applications. The use of these computers spilled into the laboratory where the DOS based IBM-PC replaced mini-computers. Compared to minicomputer, the PC provided a more for cost-effective platform for applications in numerical analysis, engineering and design, instrument control, image acquisition and image processing. In addition, the sitewide use of a common PC platform could reduce the cost of training and support services relative to cases where many different computer platforms were used. This could be especially true for the microscopists who must use computers in both the laboratory and the office.

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New Feasible Concepts of Aberration Correction for Realizing High-Resolution Electron Microscopes

Proceedings, annual meeting, Electron Microscopy Society of America ◽

10.1017/s0424820100179762 ◽

1990 ◽

Vol 48 (1) ◽

pp. 202-203

Author(s):

H. Rose

Keyword(s):

Spherical Aberration ◽

Wave Length ◽

Electron Wave ◽

Optical Lens ◽

Resolution Electron ◽

Rotationally Symmetric ◽

Electron Microscopes ◽

The Cost ◽

Imaging Performance ◽

Acceleration Voltage

The imaging performance of the light optical lens systems has reached such a degree of perfection that nowadays numerical apertures of about 1 can be utilized. Compared to this state of development the objective lenses of electron microscopes are rather poor allowing at most usable apertures somewhat smaller than 10-2 . This severe shortcoming is due to the unavoidable axial chromatic and spherical aberration of rotationally symmetric electron lenses employed so far in all electron microscopes.The resolution of such electron microscopes can only be improved by increasing the accelerating voltage which shortens the electron wave length. Unfortunately, this procedure is rather ineffective because the achievable gain in resolution is only proportional to λ1/4 for a fixed magnetic field strength determined by the magnetic saturation of the pole pieces. Moreover, increasing the acceleration voltage results in deleterious knock-on processes and in extreme difficulties to stabilize the high voltage. Last not least the cost increase exponentially with voltage.

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