Auctions: A New Method for Selling Objects with Bimodal Density Functions

Abstract

In this paper we define a new auction, called the Draw auction. It is based on the implementation of a draw when a minimum price of sale is not reached. We find that a Bayesian Nash equilibrium is reached in the Draw auction when each player bids his true personal valuation of the object. Furthermore, we show that the expected profit for the seller in the Draw auction is greater than in second-price auctions, with or without minimum price of sale. We make this affirmation for objects whose valuation can be modeled as a bimodal density function in which the first mode is much greater than the second one. Regarding the Myerson auction, we show that the expected profit for the seller in the Draw auction is nearly as good as the expected profit in the optimal auction, with the difference that our method is much more simple to implement than Myerson’s one. All these results are shown by computational tests, for whose development we have defined an algorithm to calculate Myerson auction.

Design of Mobile Application Auction for Ornamental Fish to Increase Farmer Sales Transactions in Indonesia

“…Online auctions have been conducted since the turn of the century on many websites, including ebay [4]. Online auctions enable participants or customers to sell and bid on goods using internet services [5], [6], [7]. Users may easily connect to one service thanks to this auction without being restricted by location or time by giving thorough descriptions of the goods [4], [8], [9], [10], [11].…”