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Sellers benefit on average from revealing information about their goods to buyers, but the incentive to exaggerate undermines the credibility of seller statements. When multiple goods are being auctioned, we show that ordinal cheap talk, which reveals a complete or partial ordering of the...
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Potential bidders respond to a seller’s choice of auction mechanism for a common-value or affiliated-values asset by endogenous decisions whether to incur an information-acquisition cost (and observe a private estimate), or forgo competing. Privately informed participants decide whether to...
Persistent link: https://www.econbiz.de/10014177982
The competitive bid process used by the U.S. Department of Agriculture (USDA) to procure food supplies and transportation services for humanitarian food aid is subject to bidder gaming that can increase prices and deter competition. Additionally, suppliers and carriers are matched after bid...
Persistent link: https://www.econbiz.de/10014179070
Poor user experiences with search advertisements can lead to ad avoidance thus reduce search engine’s long-term revenue. We capture the effect of negative user experiences on search engine’s future revenue in a new variable called “shadow costs” and examine the optimal keyword auction...
Persistent link: https://www.econbiz.de/10014044406
A model is presented of a uniform price auction where bidders compete in demand schedules; the model allows for common and private values in the absence of exogenous noise. It is shown how private information yields more market power than the levels seen with full information. Results obtained...
Persistent link: https://www.econbiz.de/10014045691
In this paper I study two methods often used in public procurement to deal with the risk that the winning bidder may default on his bid: augmenting the standard first price auction with an ex-post verification of the responsiveness of the bids and using an average bid auction. I show that when...
Persistent link: https://www.econbiz.de/10014045886
Suppliers often make proactive investments in capacity to strategically position themselves to win a contract with a monopolist buyer. Such investments reduce the suppliers' variable costs of serving the buyer's demand. We show that an auction mechanism does not always benefit the...
Persistent link: https://www.econbiz.de/10014048217
I introduce a property, the Own Effect Property (OEP) of player's valuations that ensures the existence of an ex post efficient equilibrium in asymmetric English auctions. The use of the OEP has the advantage of yielding an ex post efficient equilibrium without assuming differentiability of...
Persistent link: https://www.econbiz.de/10014051931