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Book part
Publication date: 21 July 2005

Richard Engelbrecht-Wiggans and Elena Katok

We present results of several experiments that deal with endogenous entry in auctions and auction valuation. One observation that is constant across all the experiments we…

Abstract

We present results of several experiments that deal with endogenous entry in auctions and auction valuation. One observation that is constant across all the experiments we report is that laboratory subjects have a difficult time evaluating potential gains from auctions. Even after they are given some experience with particular auctions, the uncertainty inherent in the auctions (the probability of winning as well as the potential gains from winning) makes it difficult for subjects to compare different auction mechanisms. This highlights the need for new experimental procedures to be used for testing theories that involve endogenous auction entry in the laboratory.

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Experimental and Behavorial Economics
Type: Book
ISBN: 978-0-76231-194-1

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Book part
Publication date: 7 July 2006

R. Mark Isaac and Kurt Schnier

Motivated by both prior experimental work and by field observations, we consider the performance of two different sealed bid versions of the silent auction. These are…

Abstract

Motivated by both prior experimental work and by field observations, we consider the performance of two different sealed bid versions of the silent auction. These are important institutional alternatives to the more familiar ascending price silent auction. In a new series of laboratory experiments, we investigate the effects of the different institutions both on aggregate efficiency and upon aggregate revenue generation.

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Experiments Investigating Fundraising and Charitable Contributors
Type: Book
ISBN: 978-0-76231-301-3

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Article
Publication date: 1 December 1995

Todd E. Rockoff and Michael Groves

Outlines the principle of the Dutch auction, whereby the price begins at a high level and decreases by steps until a bid is made. Describes an integrated hardware and…

Abstract

Outlines the principle of the Dutch auction, whereby the price begins at a high level and decreases by steps until a bid is made. Describes an integrated hardware and software system which uses Internet communications to enable remotely created bidders to participate in real‐time Dutch auctions and which meets the stringent requirement that synchrony be maintained among bidders’ terminals to ensure that each bidder has a fair chance to bid at the current offer price. Defines the principal functions of the system and characterizes its available resources. Illustrates implementation using a prototype design. Pays particular attention to bidder terminal synchronization, bidder authentication, and auction client security. Includes the possibility of a system variant using ISDN interconnect and PC‐based bidders’ terminals.

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Internet Research, vol. 5 no. 4
Type: Research Article
ISSN: 1066-2243

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Article
Publication date: 1 June 1995

William M. Taylor

It is found that one unit root, common trend is shared by the quarterly auction price series of five frequently auctioned types of stamps. The common trends analysis…

Abstract

It is found that one unit root, common trend is shared by the quarterly auction price series of five frequently auctioned types of stamps. The common trends analysis provides specific, stationary linear combinations, or cointegrating portfolios, of the auction price levels. The quarterly returns for the system of cointegrated auction prices can be represented by an error correction model using past returns and cointegrating vectors. There is evidence of a positive relationship between changes in the common trend and leading changes in industrial production

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Managerial Finance, vol. 21 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 February 2003

Hong Liu, Shouhong Wang and Teng Fei

Online auctions on the Internet have become popular. However, the communication techniques currently used in the online auction industry are primarily based on unicast…

Abstract

Online auctions on the Internet have become popular. However, the communication techniques currently used in the online auction industry are primarily based on unicast technology. Unicast‐based online auctions suffer from unbearable delay of the communication between the auctioneer and bidders. Recently, multicast is changing the Internet environment, and is penetrating to the online auction field. This study describes a model for multicast‐based online auctions. The laboratory experiments demonstrate that the communication performance of multicast‐based online auctions is significantly better than that of traditional unicast‐based auctions.

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Benchmarking: An International Journal, vol. 10 no. 1
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 6 May 2021

Tae-Hyung Pyo, JaeHwan Kwon, Thomas Gruca and Dhananjay Nayakankuppam

The endowment effect is arguably one of the most robust phenomena documented in economics, behavioral decision theory and consumer research. However, the endowment effect…

Abstract

Purpose

The endowment effect is arguably one of the most robust phenomena documented in economics, behavioral decision theory and consumer research. However, the endowment effect has traditionally been studied as a fairly static phenomenon at the transactional level of analysis.

Design/methodology/approach

This paper documents this “contagious” endowment effect using lab experiments and such field data as eBay transactions and discuss the managerial implication of these findings.

Findings

This study suggests that the endowment effect is not limited to the level of the specific object, but can manifest itself with the more abstract class of objects to which a specific object happens to belong.

Research limitations/implications

A logical next step would be to examine the boundary conditions – how similar does the subsequent object have to be for the endowment effect to transfer over to it? A related aspect would be whether there are boundary conditions arising from the quality of the endowment.

Practical implications

The effects reported here probably underlie the success of the many types of “bait and switch” schemes that have been used by the more unsavory type of marketer. As such, these findings might have implications for policy in the area of consumer protection.

Originality/value

This paper argues for and presents evidence consistent with the notion that the endowment effect is dynamic and can be transferred from one transaction to another and refer to this generalization of the endowment effect to other, similar products as “contagious endowment.”

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European Journal of Marketing, vol. 55 no. 8
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 9 June 2021

Jin Gi Kim, Hyun-Tak Lee and Bong-Gyu Jang

This paper examines whether the successful bid rate of the OnBid public auction, published by Korea Asset Management Corporation, can identify and forecast the Korea…

Abstract

Purpose

This paper examines whether the successful bid rate of the OnBid public auction, published by Korea Asset Management Corporation, can identify and forecast the Korea business-cycle expansion and contraction regimes characterized by the OECD reference turning points. We use logistic regression and support vector machine in performing the OECD regime classification and predicting three-month-ahead regime. We find that the OnBid auction rate conveys important information for detecting the coincident and future regimes because this information might be closely related to deleveraging regarding default on debt obligations. This finding suggests that corporate managers and investors could use the auction information to gauge the regime position in their decision-making. This research has an academic significance that reveals the relationship between the auction market and the business-cycle regimes.

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Journal of Derivatives and Quantitative Studies: Seonmul yeon’gu, vol. 29 no. 2
Type: Research Article
ISSN: 1229-988X

Keywords

Content available
Article
Publication date: 24 May 2021

A.N. Vijayakumar

Transparent and fair price discovery is essential to commodity market participants in the trade value chain for competitive benefit. The purpose of this paper is to…

Abstract

Purpose

Transparent and fair price discovery is essential to commodity market participants in the trade value chain for competitive benefit. The purpose of this paper is to investigate the price discovery of Indian cardamom at e-auction, spot and futures markets in addition to the existence of the day of the week effect at e-auction apart from exploring a novel price risk management framework.

Design/methodology/approach

This study used Johansen co-integration, vector error correction model, Granger causality and regression with dummy variables to understand a day of the week effect in high-value agri-commodity of cardamom e-auction prices. These price data were based on authenticated sources of Spices Board India and Multi Commodity Exchange of India Ltd.

Findings

The statistical results indicate price discovery exists in the e-auction market and it leads to spot and futures prices. cardamom e-auction prices are negatively related to cardamom futures and positively related to spot prices. It also finds the non-existence of the day of the week effect in the high-value cardamom e-auction system in India. The study revealed that a cardamom e-auction is more active in price discovery than a cardamom futures contract.

Research limitations/implications

These results shall facilitate policymakers to explore intervention of online forward market mechanism at the national level to ensure price discovery and market efficiency. However, the study did not explore reasons for the non-equilibrium of a cardamom futures contract with spot and e-auction market.

Practical implications

The results of this study are useful in understanding the price discovery of cardamom e-auction and its role in the spot and futures market. Cardamom price discovery depends upon the e-auction system; any change of auction policy shall be binding on Indian cardamom prices. The introduction of an online forward market mechanism as described in the paper shall facilitate price risk management apart from improving the efficiency of price discovery.

Originality/value

This is the first study considering cardamom e-auction, spot and futures prices in the price discovery process in India. Statistical results of a day of the week effect clearly show no significant volatility of cardamom prices during the week. Besides, this study did not find the role of cardamom futures contracts intended to serve the economic function of price discovery and price risk management. Hence, suggests policy intervention for implementing an online Forward Market mechanism for Indian cardamom to ensure market efficiency and manage price risk.

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Vilakshan - XIMB Journal of Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0973-1954

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Article
Publication date: 27 May 2021

Simen Dalland, Randi Hammervold, Henrik Tangen Karlsen, Are Oust and Ole Jakob Sønstebø

This paper aims to study aggressive bidding strategies in real estate auctions – a structural equation modelling (SEM) approach.

Abstract

Purpose

This paper aims to study aggressive bidding strategies in real estate auctions – a structural equation modelling (SEM) approach.

Design/methodology/approach

The authors use two data sets to study aggressive bidding strategies. First, the results from a survey with 1,803 participants examining real estate auctions are used to identify bidding strategies and related motivations. Second, the authors apply SEM by using data from 1,078 exclusive auction journals from real estate sales in Norway to study both the direct and indirect price effects of the bidding strategies.

Findings

The authors define four aggressive bidding strategies: high opening bid, high bid increase (jump bids), short acceptance deadline and short response time. The authors find that all four strategies yield a higher sales price. Bidders can actively influence the behaviour of the other participants and cool the potential auction fever, thus reducing the final price premium.

Originality/value

This paper gives households, investors and policymakers a better understanding of how bidding strategies affect real estate auctions and the final price.

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Journal of European Real Estate Research , vol. 14 no. 2
Type: Research Article
ISSN: 1753-9269

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Book part
Publication date: 2 May 2011

Anabela Botelho, Eduarda Fernandes and Lígia Costa Pinto

Purpose – This study constitutes a first attempt to experimentally test the performance of a 100% auction versus a 100% free allocation of CO2 permits under the rules and…

Abstract

Purpose – This study constitutes a first attempt to experimentally test the performance of a 100% auction versus a 100% free allocation of CO2 permits under the rules and parameters that mimic the EU ETS (imperfect competition, uncertainty in emissions' control, and allowing banking), with environmental targets more restrictive than the current ones but foreseeable for the near future.

Methodology/approach – Two experimental treatments were run to achieve our goal. Both included the rules and the parameters that parallel the EU ETS structure, the only difference being the rule for the primary allocation of permits.

Findings – Our experimental results indicate that the EU ETS has the potential to reduce CO2 emissions, achieving targets considerably more restrictive than the current ones at high efficiency levels, both with auctioned and free emission permits.

Practical implications – Concerns about undue scarcity, and corresponding high prices, in secondary markets generated by a primary auction market are not warranted under the proposed dynamic auction format. This adds arguments favoring auctioning over grandfathering as the rule for the initial allocation of emission permits in the EU ETS.

Originality/value of chapter – This study implements a theoretically appropriate auction format for the primary allocation of emission permits (the Ausubel (2004) auction) and incorporates a first attempt to include in the analysis measures of the risk preferences of subjects participating in emission permits experiments. These characteristics are for the first time implemented under a complex experimental design (including uncertainty of emission abatement, and banking), trying to parallel the EU ETS trading environment.

Details

Experiments on Energy, the Environment, and Sustainability
Type: Book
ISBN: 978-0-85724-747-6

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