Vehicle ownership decisions are central to estimates of emissions, gas-tax revenues, energy security, pavement management, and other concerns. This work combines an auction-style microsimulation of vehicle prices and random-utility-maximizing choices in order to produce a market model for the evolution of new and used personal-vehicle fleets. All available vehicles compete directly, with demand, supply and price signals endogenous to the model. The framework is described, analyzed and implemented to show its capabilities in predicting outcomes of varying inputs. Application of the model system using Austin, Texas survey data (for behavioral parameters and a synthetic population) over a 20-year period highlight the model’s flexibility and reasonable response to multiple inputs, as well as potential implementation issues.

background

Auctions and Auctioneering

Microsimulating Automobile Markets: Evolution of Vehicle Holdings and Vehicle-Pricing Dynamics

We characterize the optimal misbehavior by bidding rings or an auctioneer in the ascending English auction with common values. We also show, in an extended game, that in equilibrium potential members join and truthfully reveal their signals. Under a separability assumption, behavior does not change if nonring bidders are informed about the ring’s existence. In general, misbehavior in dynamic settings is more profitable than in outcome-equivalent static settings. However, under a stronger separability assumption, the ring can do no better in the dynamic English format than in the outcome-equivalent, static Sophi format. (JEL D44, D82)

Misbehavior in Common Value Auctions: Bidding Rings and Shills

Auctions used to allocate multiple units of a homogeneous good account for a large number of transactions in market economies, the most notable example perhaps being the allocation of financial and monetary instruments, such as bonds, bills and securities. The auction format used to sell many identical items has typically been a sealed bid one round auction. Recently, the multi-unit ascending auction format has been recommended as an alternative to the standard format to sell multiple units of a homogenous good. Import quota auctions in Norway represents one notable example of a practical application of this design. The experience with this auction format should be of relevance to other areas where the authorities allocate multiple units of a homogenous good. After some theoretical perspectives on multi-unit ascending auctions, the paper presents some experiences from the allocation of emission permits, securities and import quotas. Thereafter, the Norwegian experience with the ascending auction format used to allocate import quotas is presented.

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Auction design for the allocation of multiple units of a homogenous good: Theoretical background and practical experience

The global B2B e-commerce is poised to experience exponential growth in the coming years. The electronic marketplace allows buyers and sellers to engage in commerce using dynamic pricing. These dynamic pricing models result in efficient pricing based on prevailing supply/demand balance. The auction theory models are based on assumptions of bidder behavior. This study presents empirical results of bidder behavior in the context of B2C auctions. Results provide guidance to sellers whose objective is to maximize revenue.

/pdf/bidder-behavior-in-dynamic-pricing-models-an-empirical-study-wm0emawj3x.pdf

Bidder Behavior in Dynamic Pricing Models: An Empirical Study of Consumer Goods Auctions

We study sequential auctions in which bidders demand multiple units. We collect a novel data set on sequential water auctions for the empirical study. Although water units are identical, two features from the empirical setting create a trade-off whereby units of water end up being complements or substitutes. First, there is a water loss that is only incurred for the first unit, generating a sunk cost. Second, subsequent units of water exhibit decreasing marginal returns. Units of water are complements or substitutes depending on the relative importance of the sunk cost and decreasing returns. Weather seasonality provides us with the required variation (in sunk costs relative to decreasing returns) to perform the empirical investigation. When units are complements, one bidder wins all units by paying a high price for the first unit, thus deterring others from bidding on subsequent units. When units are substitutes, different bidders win the units with positive probability and pay prices of similar magnitude, even when the same bidder wins all units. We analyze this stark pattern of outcomes not investigated in the literature before. We recover individual demand consistent with this pricing behavior and confirm it is not collusive, but consistent with non-cooperative behavior. Demand estimates are biased if one ignores these features.

/pdf/complements-and-substitutes-in-sequential-auctions-the-case-398bugxy3e.pdf

Auctions and Auctioneering

Citations

Microsimulating Automobile Markets: Evolution of Vehicle Holdings and Vehicle-Pricing Dynamics

Misbehavior in Common Value Auctions: Bidding Rings and Shills

Auction design for the allocation of multiple units of a homogenous good: Theoretical background and practical experience

Bidder Behavior in Dynamic Pricing Models: An Empirical Study of Consumer Goods Auctions

Complements and Substitutes in Sequential Auctions: The Case of Water Auctions

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