Budget-constrained sequential auctions with incomplete information

Pitchik, Carolyn

doi:10.1016/j.geb.2008.10.001

Cited by 57 publications

(26 citation statements)

References 29 publications

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“…Whereas Katzman [22] and Katehakis and Puranam [21] for instance do not include a capacity constraint, the contributions of Engelbrecht-Wiggans [12], Milgrom and Weber [29], Elmaghraby [11] and Reiβ and Schöndube [37] assume a singleunit demand. Other studies include monetary constraints [36] or restrict the availability of manhours [43]. The PPP model does not account for capacity constraints and the results point towards rising mark-ups in later stages of the pipeline.…”

Section: Literaturementioning

confidence: 99%

A sequential procurement model for a PPP project pipeline

Clerck

Demeulemeester

2015

OR Spectrum

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Public-private partnerships have seen the daylight in response to the adagio that project responsibilities and risks should be efficiently allocated between the public and the private sector. Nevertheless, the considerable bidding costs inhibit the competition in the market. A trustworthy project agenda could substantiate the PPP market's attractiveness in the belief that a current success results in a knowledge and cost advantage in future tenders. This paper builds a sequential PPP procurement model and heuristically approximates the Markov perfect equilibrium in which contractors determine how much money they are willing to invest in the bid preparation and which mark-up is appropriate for each project in the pipeline. A pipeline of projects pushes down the mark-ups and the government procurement cost. Nonetheless, according to the experiments, it are only players with an initial experiential advantage who tend to make higher investment efforts so that additional governmental policies might be required to level the playing field.

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Section: Literaturementioning

confidence: 99%

A sequential procurement model for a PPP project pipeline

Clerck

Demeulemeester

2015

OR Spectrum

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“…The issue has been addressed both theoretically and experimentally with the primary focus being on the case of a monopolist who is offering commodities characterized by asymmetric information. The general thrust of the research is that the best strategy from the seller's point of view, if the ascending price auction is to be used, the best strategy is to offer the most valuable items first (Charkraborty, Gupta and Harbaugh, 2006;Goeree, Offerman and Schram, 2006;Pitchik, 2004) with some exceptions (Raviv, 2004). By contrast, this study is focused on a situation in which there is very little asymmetric information about heterogeneous goods and the auction is competitive in the sense that many other sellers are offering the goods in the auction, some of which are offered at the same time.…”

Section: Theories and Modelsmentioning

confidence: 99%

Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental examination

Grether

Plott

2009

Journal of Economic Behavior & Organization

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This paper reports on a large scale field experiment testing strategies available to a seller participating in simultaneous competitive sequential, ascending price automobile auctions. Every other week, the seller offered approximately 120 vehicles for sale in an auction environment in which several competitive sellers offered on the order of 3,000 vehicles. The experiment tested various sequences in which the seller could offer the vehicles, such as high values first or low values first. Surprisingly, and contrary to intuition drawn from the theory of single item and single seller auctions, the worst performing sequence from those tested is for the seller to order vehicles from highest to lowest values. The best sequence is to group the vehicles by type and offer the low valued vehicles first and then move to offer the higher valued vehicles. Our conjecture is that this sequence reduces the competition with other sellers for the attention of specialized buyers. JEL classification numbers: D440, L620, L810, C930, C900

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“…Elmaghraby and Keskinocak complemented the studies of sequential auctions for heterogeneous private value objects under incomplete information about future goods and other bidders' behavior [6]. For heterogeneous objects, Pitchik studied the budget-constrained sequential sealed-bid auctions based on private valuation models [7]. As an extension to Pitchik's work, we investigate suppliers' bidding behaviors under the two-stage sequential reverse auctions with capacity constrained suppliers.…”

Section: Introductionmentioning

confidence: 99%

Analysis of capacity-constrained sequential auctions in duopoly market environment

Zhang

Jin

2009

2009 IEEE International Conference on Industrial Engineering and Engineering Management

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Sequential auctions with the Vickrey-Clarke-Glove (VCG) mechanism are proposed for two buyers to purchase multiple units of an identical item. The suppliers in a duopoly market environment are assumed to have capacity constraints of providing the required product. Three research problems are studied: the suppliers' expected payoff functions, the suppliers' bidding strategies in the first auction, and the buyers' procurement costs. Both suppliers' dominant bidding strategies are theoretically derived. Suppliers' expected profits and buyers' expected procurement costs are empirically analyzed. Keywordssequential auctions, bidding strategies, capacity constrained 978-1-4244-4870-8/09/$26.00 ©2009 IEEE

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Budget-constrained sequential auctions with incomplete information

Cited by 57 publications

References 29 publications

A sequential procurement model for a PPP project pipeline

A sequential procurement model for a PPP project pipeline

Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental examination

Analysis of capacity-constrained sequential auctions in duopoly market environment

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