Procedures in which participants submit bids, with resources being allocated among bidders in accordance with some pre-specified rule.
Questions tagged [auctions]
136 questions
10
votes
3 answers
Impact of auction systems that allow 'sniping'
I'm a bit perplexed that eBay has auctions that have a fixed time ending, and so winners are often determined by who can 'snipe' the auction, by putting in the winning bid at the last possible microsecond.
Often specialised software is used to…
dwjohnston
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8
votes
4 answers
What are the benefits of a first price sealed bid auction?
All parties make a single bid. But do not disclose the bid to peers. The organizer chooses the maximum (or minimum) bid as the winner. What are benefits of such a system as opposed to normal auction where bidders openly declare the bids and keep…
balki
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7
votes
2 answers
Are lotteries auctions?
I heard one professor of my university say that "lottery is a kind of auction. So we can predict it! Then we could get a lot of money!"
Since he is in the mathematics department, and I know little about that matter, I couldn't answer to my gut…
Darae-Uri
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6
votes
1 answer
First-order condition with arbitrary function
I am trying to use an auction model to simulate bids in a uniform price carbon emissions auction. That means it would be an auction with multiple bidders and one seller selling multiple units, or shares. In such an auction, one bids for blocks of…
lbt3
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6
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1 answer
Auction models for tickets
Consider a typical event for which tickets are sold. The event only occurs once, and for simplicity we can assume that only one kind of ticket is provided, i.e, no VIP seats etc. $N$ tickets are available for purchase, and the $N$ highest bids win…
Filip Nilsson
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6
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1 answer
What are the advantages and disadvantages of second price auctions?
I am reading https://en.wikipedia.org/wiki/Vickrey_auction about second price auctions.
It seems counterintuitive to me that the winning bidder pays the
bidding price of the runner-up bidder, rather than their own winning
bidding price as in first…
Tim
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4
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1 answer
"Auction" versus "Bidding war"
Real estate sales sometimes occur at an official auction. But sometimes a seller who does not take their house to auction may find themselves entertaining multiple bids for the house. In this case, the articles on real estate always seem to talk…
zkurtz
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4
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2 answers
Virtual valuation when the distribution is discrete
The virtual valuation of a buyer in an auctin is a function used to calculate the expeced revenue of a seller from that buyer. When the buyer's value comes from a continuous distribution with pdf $f$ and cdf $F$, the virtual valuation is:
$$
r(v)…
Erel Segal-Halevi
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3
votes
1 answer
What's the definition of social welfare in a procurement auction?
In single item forward-auctions, the social welfare is defined as:
$$\sum_{i=1}^{n} v_i x_i$$
where $v_i$ is buyer $i$'s valuation for the item, and $x_i$ is a binary variable indicating whether or not $i$ gets the item.
What is definition of social…
Mengfan Ma
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3
votes
2 answers
Second Price Auction - adjusting PDF for reservation price
The situation:
There is a second price auction with 2 players. Their valuations of the object at auction are independently and identically distributed with pdf $f$ and cdf $F$ over $[0,\hat v]$. Assume $f$ is continuous and positive over $[0,\hat…
Chaerephon
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2
votes
1 answer
The mathematical denotion of why each bidder bids the expected 2nd highest bidder's value in first-price auctions
Advanced Microeconomics by Jehle and Reny (p431) contains the following theorem:
And also these comments:
Because FN-1(·) is the distribution function of the highest value
among a bidder’s N - 1 competitors, the bidding strategy displayed…
Nasan
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2
votes
2 answers
One bidder in 2nd price auction
in second priced auctions, the highest bidder wins the auction and pays the price of the second highest bidder. What happens if there's only one bidder? That bidder would have won the auction, but does the winner pay his/her own bid? Or does the…
Jax
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1
vote
1 answer
How does the punchline in this SMBC comic about "Vickrey-Clarke-Groves auctions" work?
Saturday Morning Breakfast Cereal (SMBC) showed this comic today:
I'm not entirely sure I understand this punchline. Based on what Wikipedia tells me about this form of auction, it appears to be a blind bid auction involving multiple bidders and…
Nzall
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1
vote
0 answers
Price achievable in sealed-bid pay-as-bid energy auctions
Situation
I am modeling an auction-based electricity market. Lets assume they call an auction for 500MWh, and participants can submit bids of at least 1MWh for a given price of $x$ EUR/MWh. Each participant may submit as many bids at as many prices…
charelf
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1
vote
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Deciding the winner in a Product-Mix auction
I am trying to understand how does Klemperer's Product-Mix auction work.
As I understand, given a supply I want to sell and a group of bidders, an auction system should determine who receives the products and at which price.
In a Product-Mix…
Jaime Tobar
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