In this paper we present a new improved design for multiobject auctions and report on the results of experimental tests of that design. We merge the better features of two extant but very different auction processes, the Simultaneous Multiple Round (SMR) design used by the FCC to auction the electromagnetic spectrum and the Adaptive User Selection Mechanism (AUSM) of Banks et al. (1989, "Allocating uncertain and unresponsive resources: An experimental approach," RAND Journal of Economics, Vol. 20, No. 1, pp. 1--25). Then, by adding one crucial new feature, we are able to create a new design, the Resource Allocation Design (RAD) auction process, which performs better than both. Our experiments demonstrate that the RAD auction achieves higher efficiencies, lower bidder losses, higher net revenues, and faster times to completion without increasing the complexity of a bidder's problem.auctions, experimental economics, combinatorial auctions

In this paper we present a new improved design for multi-object auctions and report on the results of tests of that design. We merge the better features of two extant but very different auction processes, the Milgrom FCC design (see Milgrom (1995)) and the Adaptive User Selection Mechanism (AUSM) of Banks et al. (1989)). Then, by adding one crucial new feature, we are able to create a new design, the Resource Allocation Design (RAD) auction process, which performs better than both. We are able to demonstrate, in both simple and complex environments, that the RAD auction achieves higher efficiencies, lower bidder losses, and faster times to completion without increasing the complexity of a bidder's problem.

The majority of reverse auctions for procurement use a single-attribute (price) format while providing constraints on nonprice attributes such as quality and lead time. Alternatively, a buyer could choose to conduct a multiattribute auction where bidders can specify both a price and levels of nonprice attributes. While such an auction may provide higher theoretical utility to the buyer, it is not clear that this theoretical improvement will be realized given the increased complexity of the auction. In this research, we present an ascending auction mechanism for a buyer whose utility function is known and dependent on three attributes. Motivated by a supply chain procurement problem setting, we consider quality and lead time for the two attributes in addition to price. The auction mechanism provides the bidders with restricted feedback regarding the buyer's utility function. We explore, experimentally, the performance of this multiattribute auction mechanism as compared to a price-only auction mechanism. Compared with the price-only auction, we find that our mechanism design is effective in increasing both buyer utility and bidder (supplier) profits.auctions, experimental economics, supply chain management

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We investigate how auctioneers set reserve prices in auctions. A well-established theoretical result, assuming risk neutrality of the seller, is that the optimal reserve price should not depend on the number of participating bidders. In a set of controlled laboratory experiments, we find that seller behavior often deviates from the theoretical benchmarks. We extend the existing theory to explore three alternative explanations for our results: risk aversion, anticipated regret, and probability weighting. After fitting our data to each of these models through parameter estimation techniques on both an aggregate and individual level, we find that all three models are consistent with some of the characteristics of our data, but that the regret model provides a slightly more favorable fit overall. This paper was accepted by Teck-Hua Ho, decision analysis.reserve prices, procurement auctions, behavioral operations