Uniform price auctions with a last accepted bid pricing rule

Burkett, Justin; Woodward, Kyle

doi:10.1016/j.jet.2019.104954

Cited by 18 publications

(22 citation statements)

References 43 publications

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“…First, it would be interesting to compare the performance of different methods for improving revenues, including the buyout option, reserve price (Bresky, 2013), and change of pricing rules (Burkett & Woodward, 2020). An experimental approach seems suitable for this purpose.…”

Section: Discussionmentioning

confidence: 99%

“…To the best of my knowledge, this paper is the first to analyze UPA with a buyout option. Moreover, the literature on how to improve revenues in UPA has not yet addressed the question of preauction buyout options (see, e.g., Burkett & Woodward, 2020; Kremer & Nyborg, 2004a, 2004b; McAdams, 2007). We believe that our analysis is the first step toward a deeper understanding of this issue with respect to UPA.…”

Section: Introductionmentioning

confidence: 99%

“…In UPA with indivisible goods, a change of pricing rules can serve this purpose. Burkett and Woodward (2020) show that the expected revenue improves dramatically if the hammer price is determined as the lowest accepted bid rather than the highest rejected bid. Moreover, Bresky (2013) argues that a positive reserve price can improve both revenue and efficiency.…”

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confidence: 99%

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A buyout option alleviates implicit collusion in uniform‐price auctions

Tsuchihashi

2021

Manage Decis Econ

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Demand reduction causes extremely low revenues in uniform‐price auctions, which can be interpreted as implicit collusion among bidders. We model a uniform‐price auction with a buyout option and investigate its potential for alleviating implicit collusion. We focus on the extreme case that yields a revenue of zero with no buyout option. Our main result is that the seller obtains a positive expected revenue unless the buyout price is high. Notably, a bidder will exercise a buyout option even though the bidder is risk neutral; that is, auction aversion is fully endogenous, in contradiction to the findings of previous work.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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A buyout option alleviates implicit collusion in uniform‐price auctions

Tsuchihashi

2021

Manage Decis Econ

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“…The uniform-price auction, first introduced by Milton Friedman (Friedman, 1960), is the auction that utilise a uniform payment for all bidders. Most uniform-price auctions use the first rejected bid (the highest losing bid) as the market-clearing price, however, the last accepted bid (or the lowest winning bid) is also used (Burkett and Woodward, 2020).…”

Section: Payment Rulementioning

confidence: 99%

“…Tenorio (1999) does not examine a more general case comparing two quantity floors that are both smaller than the total supply. Burkett and Woodward (2020) with a relatively general model of private values, show that the undesirable properties of the uniform-price auction are closely related to the first losing bid rule as the payment rule. They suggest the alternative last accepted bid pricing rule results in an equilibrium that has relatively flat bids compared to the full information case.…”

Section: Eliminating Low-revenue Equilibria In Private Value Uniform Auctionsmentioning

confidence: 99%

Multi-Unit Auctions: A Survey of Theoretical Literature

Khezr

Cumpston²

2020

SSRN Journal

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This article aims to provide a comprehensive survey of the theoretical research on multi-unit auctions to help identify the gap in this literature. Multi-unit auctions have been extensively used in practise and account for significant amount of transactions in some real-world markets. However, the theoretical research on these auctions has attract less attention compared to single unit auctions. The focus of this article is on those research that study multi-unit auctions for the sale of multiple units of homogeneous objects to potential buyers with more than one unit demand. The articles are categorized based on the assumptions of their models regarding bidders' values and the type of auction. Further the gap in this literature is identified with those areas that require further theoretical research.

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Strategy and design of multi‐unit auction in grouped asymmetric setting

Chen

Dong²,

Cao³

et al. 2022

Manage Decis Econ

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In this study, the difference amongst bidders is modelled by the two parameters of valuation and marginal utility. Thus, the symmetrical multi‐unit auction is extended to the asymmetric private value model. The optimal strategy of any different bidders can be solved by the model, which expands the practical application of multi‐unit auction theory. On this basis, the yield and price volatility of different auction mechanisms under the ‘two‐group case’ are evaluated. The results show that Vickrey auction is generally superior to uniform price auction. Different from the other two formats, the fluctuation range of discriminatory price auction revenue is large.

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Uniform price auctions with a last accepted bid pricing rule

Cited by 18 publications

References 43 publications

A buyout option alleviates implicit collusion in uniform‐price auctions

A buyout option alleviates implicit collusion in uniform‐price auctions

Multi-Unit Auctions: A Survey of Theoretical Literature

Strategy and design of multi‐unit auction in grouped asymmetric setting

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