Search results for "auction"
showing 10 items of 40 documents
The Relevance of Bargaining for the Licensing of a Cost-reducing Innovation*
2001
In the context of a Cournot duopoly, this paper studies the licensing of a cost-reducing innovation by means of three possible allocation mechanisms: auction, fixed fee, and direct negotiation. Once the use of an arbitrary reserve price (which is not credible) has been excluded, it is no longer true that auction always yields higher profit to the patentee than a fixed fee. However, the authors propose a direct negotiation mechanism which restores the patentee’s profit to the level of an auction with an arbitrary reserve price (which is unimplementable). Direct negotiation is superior to both an auction with a nonarbitrary reserve price and a fixed fee. From the social point of view, however…
Secret versus public reserve price in an “outcry” English procurement auction: Experimental results
2015
Abstract In a set of human experiments, we analyze the impact of the buyer׳s reserve price policy in an online open outcry reverse auction. We measure the impact of revealing or not the reserve price on the buyer׳s expected cost when suppliers may be risk-averse. Results confirm that the optimal public reserve price policy dominates for the buyer when the lowest cost supplier is weakly risk-averse but in contrast with theory, the secret reserve price policy does not dominate when he becomes very risk-averse. Analysis of strategic suppliers׳ bidding behavior shows, in conformity with theory, that they react to the secret reserve price and are more aggressive when they are more risk-averse. T…
Design of Public Procurement Auctions: Evidence from Cleaning Contracts
2018
We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: (i) Entry strongly decreases the procurement cost but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. (ii) Municipalities favored in-house suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out. Peer reviewed
Shilling, Squeezing, Sniping. A further explanation for late bidding in online second-price auctions
2021
Abstract Several studies provide empirical evidence for sniping (i.e., waiting until the last few seconds to bid) in second-price internet auctions, particularly in auctions at eBay . This evidence was regarded as puzzling and an anomaly for an extended period: How could sniping be consistent with rational behaviour in second-price auctions, where theory predicts that bids’ timing plays no role and there is no incentive to bid less than one’s private value. An essential contribution to this puzzling issue has been the insight by Bose and Daripa (2017) that late bidding is itself a response to the shilling. Their paper explains well late bidding for repeating auctions. However, late bidding …
Participation Costs and Inefficiency in Takeover Contests
2010
We consider a takeover in which risk neutral bidders incur private costs to participate to the auction. Supposing that valuations for target firm are common knowledge, we study the optimal strategy of bidders and analyze the takeover result when they get or not toeholds in the target firm. We found that bidder's decision of participation is endogenous. By analyzing bidder's condition of participation, we found that the probability that the potential bidder with the highest valuation will not participate to the control, exists. We show that this probability increases with the size of toeholds possessed by the bidder with low valuation. Nevertheless, the size of toeholds possessed by the bidd…
Multiple Motivations Consequences on Bidder's Optimal Strategy in Takeover Contests
2011
This paper examines the optimal bidding strategy in takeover contests for a target firm, and the positive correlation between the bidders’ valuation. We consider risk neutral bidders who compete for the control of a target firm in which they get initial shareholdings. The bidder valuation for target firm is correlated with his motivations which determine the bidder’s strategy. We study bidder’s optimal strategy in mixed motivations setting. Since motivations are numerous, hypothesis of affiliated value in auctions allows to study bidder’s strategy. The paper shows that the impact of affiliation degree on bidder’s optimal strategy depends on their private signal and on the ratio between thei…
Assessing the effect of information on the reservation price for Champagne: what are consumers actually paying for?
2018
AbstractTwo series of Vickrey auctions have been performed to assess the effect of packaging information (bottle and label) on the reservation prices of ordinary consumers for five brut non-vintage Champagnes. As in other studies on wine tasting, packaging information is found to explain much more of the variation in willingness to pay than sensory information. Participants are unable, or unwilling, to put different values on the Champagnes after blind tasting, but significant differences in reservation prices appear when labels are disclosed. Detailed analysis of choices reveals a large heterogeneity in individual behaviors and valuations of the Champagnes included in this study. (JEL Clas…
Impact of information and in-home sensory exposure on liking and willingness to pay: The beginning of Fairtrade labeled coffee in France.
2015
This study was conducted to assess how the Fairtrade label interacts with the perception of intrinsic product characteristics on liking and purchase decisions and to estimate the evolution of this interaction after exposure to the coffees and/or exposure to ethical information. In a first session, 119 consumers gave liking scores for 2 regular and 2 Fairtrade coffees under a blind tasting condition. Then, they were asked to indicate the maximum price they would pay for each product in 2 auctions taking place under different information conditions. In the first auction, participants saw the packaging but did not taste the coffee; in the second auction, they could both taste the coffee and se…