e-business, prof. sheizaf rafaeli 1 auctions! prof. sheizaf rafaeli e-commerce

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E-Business, Prof. Sheizaf Rafaeli 1 Auctions Auctions ! ! Prof. Sheizaf Rafaeli Prof. Sheizaf Rafaeli E-Commerce E-Commerce

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Page 1: E-Business, Prof. Sheizaf Rafaeli 1 Auctions! Prof. Sheizaf Rafaeli E-Commerce

E-Business, Prof. Sheizaf Rafaeli 1

AuctionsAuctions!!

Prof. Sheizaf RafaeliProf. Sheizaf Rafaeli

E-CommerceE-Commerce

                  

            

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AuctionsAuctions

Everything is (becoming?) negotiable.Everything is (becoming?) negotiable.

Auctio = increase,Auctio = increase, ( (יוסףיוסף) ) (but not all auctions are about increasing prices!)(but not all auctions are about increasing prices!)

Auctions are useful for price discoveryAuctions are useful for price discovery Auctions are useful to move merchandise quicklyAuctions are useful to move merchandise quickly Is Is everythingeverything auctionable? auctionable?

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AuctionsAuctionsdefinitions?definitions?

A competition-based method of allocating scarce goods.A competition-based method of allocating scarce goods.An An auctionauction is a method of allocating scarce goods, is a method of allocating scarce goods,

– a method that is based upon competition: a method that is based upon competition: » A seller wishes to obtain as much money as possible, A seller wishes to obtain as much money as possible, » A buyer wants to pay as little as necessary. A buyer wants to pay as little as necessary.

An auction offers the advantage of simplicity in determining market-based An auction offers the advantage of simplicity in determining market-based prices. prices.

It is efficient in the sense that it usually ensures that It is efficient in the sense that it usually ensures that – resources accrue to those who value them most highly;resources accrue to those who value them most highly;– sellers receive the collective assessment of the value. sellers receive the collective assessment of the value.

Often, the auctioneer is not owner but agent. Often, the auctioneer is not owner but agent. Rules set by seller, price set by bidder.Rules set by seller, price set by bidder. Most efficient, purest of markets .Most efficient, purest of markets . Are auctions the most fair mechanism?Are auctions the most fair mechanism?

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Auctions very popular in B2BAuctions very popular in B2B

                                                                    

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Let’s play the “auction a dollar” Let’s play the “auction a dollar” gamegame

Wanna buy a dollar (shekel) for a nickel?Wanna buy a dollar (shekel) for a nickel? Anyone can play. Anyone can play. Highest bidder gets it.Highest bidder gets it. Both highest and second highest bidder pay.Both highest and second highest bidder pay. Payment to occur online, in view of class.Payment to occur online, in view of class. All bids are All bids are publicpublic, , audible audible and not sealed, and not sealed, in in

view of classview of class.. No union, monopoly or “rings” allowed.No union, monopoly or “rings” allowed. TIME IS MONEY!TIME IS MONEY!

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When are Auctions used?When are Auctions used?

Auctions are useful when Auctions are useful when – selling a commodity of undetermined quality;selling a commodity of undetermined quality;

– the goods do not have a fixed or determined market value, in other the goods do not have a fixed or determined market value, in other words, when a seller is unsure of the price he can get. words, when a seller is unsure of the price he can get.

Choosing to sell an item by auctioning it off is Choosing to sell an item by auctioning it off is – more flexible than more flexible than setting a fixed pricesetting a fixed price;;

– less time-consuming and expensive than less time-consuming and expensive than negotiatingnegotiating a price. a price.

Auctions can be used Auctions can be used – for single items such as a work of art;for single items such as a work of art;

– and for multiple units of a homogeneous item such as gold or and for multiple units of a homogeneous item such as gold or Treasury securities.Treasury securities.

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PricesPrices

The price is set not by the seller, but by the bidders. The price is set not by the seller, but by the bidders. The seller sets the rules by choosing the type of auction The seller sets the rules by choosing the type of auction

to be used. to be used. The auctioneer doesn't often own the goods, but acts The auctioneer doesn't often own the goods, but acts

rather, as an agent for someone who does. rather, as an agent for someone who does. The buyers frequently know more than the seller about the The buyers frequently know more than the seller about the

value of the item. value of the item. A seller, not wanting to suggest a price first out of fear that A seller, not wanting to suggest a price first out of fear that

his ignorance will prove costly, holds an auction to extract his ignorance will prove costly, holds an auction to extract information he might not otherwise realize. information he might not otherwise realize.

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Auction TerminologyAuction Terminology

Anonymity Anonymity - - Open (Cry) Open (Cry)

or Sealed Bidor Sealed Bid ConfidentialityConfidentiality - - are are

participant(s) and winner(s) participant(s) and winner(s) identities revealedidentities revealed

SecrecySecrecy - - is inventory is inventory amount disclosedamount disclosed

TimingTiming - - pre-specified pre-specified closing time, interval, closing time, interval, price-determined, etc.price-determined, etc.

ValuationValuation Discriminative?Discriminative? - - does does

everyone pay the same price, or everyone pay the same price, or what they bid?what they bid?

Restrictions Restrictions Increments Increments Reserve priceReserve price

Internet AuctionsKumar and FeldmanIBM Research : http://www.ibm.com/iac/papers/auction_fp.pdf

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Bidder ValuationsBidder Valuations

Reasons for bidding in the auction:Reasons for bidding in the auction:– a bidder wishes to acquire goods for personal consumption (wine a bidder wishes to acquire goods for personal consumption (wine

or art);or art);

– a bidder wishes to acquire items for resale or commercial use.a bidder wishes to acquire items for resale or commercial use.

Private valuationPrivate valuation– Goods are acquired goods for personal consumption; Goods are acquired goods for personal consumption;

– The bidder makes his own private valuation of the item for sale. The bidder makes his own private valuation of the item for sale.

– All bidders have private valuations and tend to keep that All bidders have private valuations and tend to keep that information private.information private.

» There would be little point in an auction if the seller knew already There would be little point in an auction if the seller knew already how much the highest valuation of an object will be. how much the highest valuation of an object will be.

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Bidder Valuations (cont.)Bidder Valuations (cont.)

Common valuationCommon valuation– Goods are acquired goods for resale or commercial use; Goods are acquired goods for resale or commercial use;

– An individual bid is predicated not only upon a private valuation An individual bid is predicated not only upon a private valuation reached independently, but also upon an estimate of future reached independently, but also upon an estimate of future valuations of later buyers. Each bidder of this type tries (using the valuations of later buyers. Each bidder of this type tries (using the same measurements) to guess the ultimate price of the item. same measurements) to guess the ultimate price of the item.

– The item is really worth the same to all, but the exact amount is The item is really worth the same to all, but the exact amount is unknownunknown

ExampleExample– Purchasing land for its mineral rights Purchasing land for its mineral rights

» Each bidder has different information and a different valuation, but Each bidder has different information and a different valuation, but each must guess what price the land might ultimately bring. each must guess what price the land might ultimately bring.

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Taxonomy of AuctionsTaxonomy of Auctions

William Vickrey [Vickrey] established the basic William Vickrey [Vickrey] established the basic taxonomy of auctions based upon the taxonomy of auctions based upon the order in order in which prices are quotedwhich prices are quoted and the and the manner in manner in which bids are tenderedwhich bids are tendered. He established four . He established four major (one sided) auction typesmajor (one sided) auction types::

– English: Ascending-price, open-cry;English: Ascending-price, open-cry;– Dutch: descending-price, open-cry,Dutch: descending-price, open-cry,– First-price, sealed bid,First-price, sealed bid,– Vickrey or second-price, sealed bidVickrey or second-price, sealed bid..

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Auction TypesAuction Types

English, Dutch, First-price sealed-bid, Vickrey English, Dutch, First-price sealed-bid, Vickrey (Uniform Second-price sealed bid)(Uniform Second-price sealed bid)

Naming problems Naming problems (in financial community:(in financial community:

English is sealed, Dutch is something else)English is sealed, Dutch is something else)

Winner’s Curse:Winner’s Curse: The winner actually bids the furthest The winner actually bids the furthest from the average bid, which is the best estimate of the from the average bid, which is the best estimate of the item’s actual worth (reasonable information).item’s actual worth (reasonable information).

Do you really want to hire the employee passed over by Do you really want to hire the employee passed over by allall others? others? John Glenn’s story.John Glenn’s story.

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Auction types - Auction types - The English AuctionThe English Auction

Private vs. Common valuationPrivate vs. Common valuation Audible bids, open outcry, ascending priceAudible bids, open outcry, ascending price reserve price, “knocked down”reserve price, “knocked down” Roles of anonymity and experienceRoles of anonymity and experience

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Reserve PriceReserve Price

A A reserve pricereserve price is the minimum price that would enable is the minimum price that would enable the sale to occur.the sale to occur.

When a reserve price is not met, the item is not sold. When a reserve price is not met, the item is not sold. Sometimes the auctioneer will maintain secrecy about the Sometimes the auctioneer will maintain secrecy about the

reserve price, and he must start the bidding without reserve price, and he must start the bidding without revealing the lowest acceptable price. revealing the lowest acceptable price.

One possible explanation for the secrecy is to thwart One possible explanation for the secrecy is to thwart rings.rings. A A ringring is subsets of bidders who have banded together and is subsets of bidders who have banded together and

agree not to outbid each other, thus effectively lowering agree not to outbid each other, thus effectively lowering the winning bid. the winning bid.

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Disadvantages of English AuctionDisadvantages of English Auction

The key to any successful auction (from a seller's point of The key to any successful auction (from a seller's point of view) is the effect of view) is the effect of competitioncompetition among the potential among the potential buyers. buyers.

In an English auction, the underbidder usually forces the In an English auction, the underbidder usually forces the bid up by one small step at a time. Often a successful bid up by one small step at a time. Often a successful bidder acquires an object for considerably less than his bidder acquires an object for considerably less than his maximum valuation simply because he need only increase maximum valuation simply because he need only increase each bid by a small increment. each bid by a small increment.

– the seller does not necessarily receive maximum value.the seller does not necessarily receive maximum value. Other auction types may be superior to the English auction Other auction types may be superior to the English auction

for this reason (at least from the seller's perspective). for this reason (at least from the seller's perspective).

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Auction types:Auction types:Dutch AuctionDutch Auction

Descending priceDescending price Later winners pay lessLater winners pay less Used to sell flowers and fish, credit, and Used to sell flowers and fish, credit, and

antiques.antiques. Seller could (due to psychology) more Seller could (due to psychology) more

likely receive top price.likely receive top price. Think about auction “frenzy”Think about auction “frenzy”

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Auction types: Auction types: Sealed-Bid (discriminatory)Sealed-Bid (discriminatory)

A bidding period followed by a resolution A bidding period followed by a resolution phasephase

““Discriminatory” Discriminatory” when more than one item when more than one item sold, at varying prices.sold, at varying prices.

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First Price- Sealed BidFirst Price- Sealed Bid

SealedSealed (not open-outcry like the English or Dutch (not open-outcry like the English or Dutch varieties) and thus hidden from other bidders.varieties) and thus hidden from other bidders.

A winning bidder pays exactly the amount he bid.A winning bidder pays exactly the amount he bid. Usually, (but not always) each participant is allowed one Usually, (but not always) each participant is allowed one

bid which means that bid preparation is especially bid which means that bid preparation is especially important. important.

a sealed-bid format has two distinct periodsa sealed-bid format has two distinct periods– a bidding perioda bidding period in which participants submit their bids; in which participants submit their bids;

– a resolution phasea resolution phase in which the bids are opened and the winner is in which the bids are opened and the winner is determined (sometimes the winner is not announced). determined (sometimes the winner is not announced).

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Multiple Items in a First-Price, Sealed Bid Multiple Items in a First-Price, Sealed Bid AuctionAuction

When multiple units are being auctioned, the auction is When multiple units are being auctioned, the auction is called "called "discriminatorydiscriminatory" because " because not all winning bidders not all winning bidders pay the same amountpay the same amount. .

In a first-price auction (one unit up for sale) each bidder In a first-price auction (one unit up for sale) each bidder submits one bid in ignorance of all other bids. submits one bid in ignorance of all other bids.

The highest bidder wins and pays the amount he bid.The highest bidder wins and pays the amount he bid. In a "discriminatory” auction, sealed bids are sorted from In a "discriminatory” auction, sealed bids are sorted from

high to low, and items are awarded at highest bid price high to low, and items are awarded at highest bid price until the supply is exhausted. until the supply is exhausted.

Winning bidders can (and usually do) pay different Winning bidders can (and usually do) pay different prices.prices.

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Bidding StrategyBidding Strategy

From a bidder's point of view, a From a bidder's point of view, a high bid raises the high bid raises the probability of winningprobability of winning but but lowers the profitlowers the profit if the bidder if the bidder is victorious. is victorious.

A good strategy is to shade a bid downward closer to A good strategy is to shade a bid downward closer to market consensus, a strategy that also helps to avoid market consensus, a strategy that also helps to avoid winner's cursewinner's curse. .

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Auction types:Auction types:Uniform Second PriceUniform Second Price

Named for William VickreyNamed for William Vickrey(called “Dutch Auction” in the financial community)(called “Dutch Auction” in the financial community)

Highest bidder wins, but pays only the price Highest bidder wins, but pays only the price offered by second bidderoffered by second bidder

Sealing is imperative.Sealing is imperative.

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The Vickrey AuctionThe Vickrey Auction

The The uniform second-price auctionuniform second-price auction is commonly called is commonly called the the Vickrey auction.Vickrey auction.

The bids are sealed, and each bidder is ignorant of other The bids are sealed, and each bidder is ignorant of other bids. bids.

The item is awarded to highest bidder at a price equal to The item is awarded to highest bidder at a price equal to the second-highest bid (or highest unsuccessful bid). the second-highest bid (or highest unsuccessful bid). – winner pays less than the highest bid. winner pays less than the highest bid.

ExampleExample– Suppose bidder A bids $10, bidder B bids $15, and bidder C offers Suppose bidder A bids $10, bidder B bids $15, and bidder C offers

$20, bidder C would win, however he would only pay the price of $20, bidder C would win, however he would only pay the price of

the second-highest bid, namely $15.the second-highest bid, namely $15.

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The Vickrey Auction (cont.)The Vickrey Auction (cont.)

When auctioning multiple units, all winning bidders pay When auctioning multiple units, all winning bidders pay for the items at the same pricefor the items at the same price

– the highest losing pricethe highest losing price.. It seems obvious that a seller would make more money by It seems obvious that a seller would make more money by

using a first-price auction, but, in fact, that has been shown using a first-price auction, but, in fact, that has been shown to be untrue.to be untrue.

Bidders fully understand the rules and modify their bids as Bidders fully understand the rules and modify their bids as circumstances dictate. circumstances dictate.

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Bid adjustmentBid adjustment

In the case of a Vickrey auction, bidders adjust upward. In the case of a Vickrey auction, bidders adjust upward. No one is deterred out of fear that he will pay too high a No one is deterred out of fear that he will pay too high a price. Aggressive bidders receive sure and certain awards price. Aggressive bidders receive sure and certain awards but pay a price closer to market consensus. but pay a price closer to market consensus.

The price that winning bidder pays is determined by The price that winning bidder pays is determined by competitors' bids alone and does not depend upon any competitors' bids alone and does not depend upon any action the bidder undertakes. action the bidder undertakes.

Less bid shading occurs because people don't fear Less bid shading occurs because people don't fear winner'swinner's cursecurse..

Bidders are less inclined to compare notes before an Bidders are less inclined to compare notes before an

auction.auction.

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ClassificationClassification

EnglishSeller announces reserve price or some low opening bid. Bidding increases progressively until demand falls. Winning bidder pays highest valuation. Bidder

may re-assess evaluation during auction.

Dutch Seller announces very high opening bid. Bid is lowered progressively until demand rises to match supply.

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Classification (cot..)Classification (cot..)

First-price, sealed bid or discriminatory

Bids submitted in written form with no knowledge of bids of others. Winner pays the exact amount he bid.

Vickrey Bids submitted in written form with no knowledge of the bids of others. Winner pays the second-highest amount bid.

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Auction types:Auction types:Double AuctionsDouble Auctions

Both bidders and sellers submit “bids”, Both bidders and sellers submit “bids”, “asks”.“asks”.

Has roots in hagglingHas roots in haggling Offers are ranked.Offers are ranked. Double dutch auction runs two sequential Double dutch auction runs two sequential

clocks.clocks. Probably very attractive when computerized.Probably very attractive when computerized.

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Reverse AuctionsReverse Auctions

Priceline.comPriceline.com

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Other auction typesOther auction types

Simultaneous bidding (Japanese)Simultaneous bidding (Japanese) Haphazard (random) orderHaphazard (random) order Handshake (Chinese) formatHandshake (Chinese) format WhisperWhisper Candle-light (time-interval)Candle-light (time-interval) Silent Silent Swiss (with regrets!)Swiss (with regrets!)

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Auction StrategiesAuction Strategies

Economists use a framework called Economists use a framework called game theorygame theory to think to think about auction behavior.about auction behavior.

Using game theory economists examine rational behavior Using game theory economists examine rational behavior and decisions made in varying conditions.and decisions made in varying conditions.

Buyers bid differently depending upon the rules of an Buyers bid differently depending upon the rules of an auction, and it is worth understanding the rules of an auction, and it is worth understanding the rules of an auction thoroughly.auction thoroughly.

A seller is faced with choosing an auction type, and so he A seller is faced with choosing an auction type, and so he must predict the behavior of bidders. must predict the behavior of bidders.

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Auction Strategies (cot..)Auction Strategies (cot..)

On the other hand, a bidder tries to predict the behavior of On the other hand, a bidder tries to predict the behavior of the other bidders. Each bidder makes an estimate of his the other bidders. Each bidder makes an estimate of his own value of the object and also an estimate of what others own value of the object and also an estimate of what others will bid on it. Good bidding is often the result of correct will bid on it. Good bidding is often the result of correct predictions about the behavior of others and sometimes predictions about the behavior of others and sometimes that means guessing the extent of someone else's that means guessing the extent of someone else's information correctly.information correctly.

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From a Seller's PerspectiveFrom a Seller's Perspective

In any auction a seller can influence results by revealing In any auction a seller can influence results by revealing information about the object.information about the object.

Intuitively, a bidder's profits rise when he can exploit Intuitively, a bidder's profits rise when he can exploit information asymmetries (when the bidder has information information asymmetries (when the bidder has information not available to others). not available to others).

So a seller's optimal strategy is to reveal information and So a seller's optimal strategy is to reveal information and to link the final price to outside indicators of value (an to link the final price to outside indicators of value (an authoritative evaluation). authoritative evaluation). – if a seller seems reluctant to disclose something, a buyer always if a seller seems reluctant to disclose something, a buyer always

assumes the hidden information must be unfavorable.assumes the hidden information must be unfavorable.

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English StrategyEnglish Strategy

In a private-value English auction, a player's best strategy In a private-value English auction, a player's best strategy is to bid a small amount more than the previous high bid is to bid a small amount more than the previous high bid until he reaches his valuation and then stop. until he reaches his valuation and then stop.

This is optimal because he always wants to buy an object This is optimal because he always wants to buy an object if the price is less than its value to him, but he wants to pay if the price is less than its value to him, but he wants to pay the lowest possible price. the lowest possible price.

Bidding always ends when the price reaches the valuation Bidding always ends when the price reaches the valuation of the player with the second-highest valuation. of the player with the second-highest valuation.

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English Strategy (cot..)English Strategy (cot..)

An advantage to English auctions is that a bidder gains information. An advantage to English auctions is that a bidder gains information. He can observe and see not only that other players drop out, but also He can observe and see not only that other players drop out, but also the price at which the competition abandons the bidding. That tells a the price at which the competition abandons the bidding. That tells a bidder a great deal about the valuations of others and allows a bidder bidder a great deal about the valuations of others and allows a bidder

to revise his valuation.to revise his valuation. A player's strategy is his series of bids as a function of A player's strategy is his series of bids as a function of

– his value;his value;

– his prior estimate of the other players' valuations; his prior estimate of the other players' valuations;

– the past bids of other players. the past bids of other players.

His bid can be updated as information changes. His bid can be updated as information changes.

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Dutch StrategyDutch Strategy

At some point in advance, the bidder must decide the At some point in advance, the bidder must decide the maximum amount he will bid (the same problem as that maximum amount he will bid (the same problem as that facing a bidder in a sealed-bid auction) . facing a bidder in a sealed-bid auction) .

The decision is based uponThe decision is based upon– his own valuation of the object;his own valuation of the object;

– his prior beliefs about the valuations of other bidders. his prior beliefs about the valuations of other bidders.

This auction type is strategically equivalent to first-price This auction type is strategically equivalent to first-price sealed auction because no relevant information is disclosed sealed auction because no relevant information is disclosed in the course of the auction, only at the end when it is too in the course of the auction, only at the end when it is too

late.late.

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First Price, Sealed Bid StrategyFirst Price, Sealed Bid Strategy

It is difficult to specify a single strategy because a profit-It is difficult to specify a single strategy because a profit-maximizing bid depends upon the actions of others. maximizing bid depends upon the actions of others.

The tradeoff is between bidding high and winning more The tradeoff is between bidding high and winning more often, and bidding low and benefiting more if the bid wins often, and bidding low and benefiting more if the bid wins (bigger profit margin). (bigger profit margin).

Most bidders attempt to shade their bids to move closer to Most bidders attempt to shade their bids to move closer to

market consensus. This also helps to avoid winner's curse.market consensus. This also helps to avoid winner's curse.

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Vickery StrategyVickery Strategy

The dominant strategy for a bidder in a Vickrey (second-The dominant strategy for a bidder in a Vickrey (second-price) auction is to submit a bid equal to his true price) auction is to submit a bid equal to his true reservation price because he then accepts all offers below reservation price because he then accepts all offers below his reservation bid and none that are above. (according to his reservation bid and none that are above. (according to Paul Milgrom)Paul Milgrom)

A participant who bids less is more likely to lose the A participant who bids less is more likely to lose the auction and all that strategy accomplishes is to lower the auction and all that strategy accomplishes is to lower the chance of victory. Bidding high carries the risk of winner's chance of victory. Bidding high carries the risk of winner's

curse. Neither affects the price paid if he wins.curse. Neither affects the price paid if he wins.

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Vickery Strategy (cont.)Vickery Strategy (cont.) When each bidder adopts a strategy of bidding his true price, When each bidder adopts a strategy of bidding his true price,

the outcome is that the item is awarded to the bidder with the the outcome is that the item is awarded to the bidder with the highest valuation at a price equal to the second highest highest valuation at a price equal to the second highest valuation.valuation.

The existence of a dominant strategy means that bidder can The existence of a dominant strategy means that bidder can determine his own sealed bid without regard for the actions determine his own sealed bid without regard for the actions of others. of others.

So a second-price auction duplicates the principal So a second-price auction duplicates the principal characteristics of an English auction. characteristics of an English auction.

A potential drawback is that this system requires total A potential drawback is that this system requires total honesty from the auctioneer(s). If the auctioneer is not honesty from the auctioneer(s). If the auctioneer is not trustworthy, he could open the bids, find the winner and trustworthy, he could open the bids, find the winner and insert a new bid just barely under that to ensure higher insert a new bid just barely under that to ensure higher revenues.revenues.

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SnipingSniping

http://www.esnipe.comhttp://www.esnipe.com http://www.BidNip.comhttp://www.BidNip.com http://www.auctionstealer.comhttp://www.auctionstealer.com http://auctionblitz.comhttp://auctionblitz.com

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Auctions could be trouble...Auctions could be trouble...

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Auction Collusion and TricksAuction Collusion and Tricks According to Fraud.org, online auctions were the #1 According to Fraud.org, online auctions were the #1

source (68%) of complaints in 1998, up from 26% in source (68%) of complaints in 1998, up from 26% in 1997.1997.

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In 1999, things got worse...In 1999, things got worse...

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Somewhat better in 2000Somewhat better in 2000(but not much)(but not much)

2000 Internet Fraud Statistics1999 Top 10 Frauds 2000 Top 10 Frauds

Online Auctions 87% Online Auctions 78%

General Merchandise Sales 7% General Merchandise Sales 10%

Internet Access Services 2% Internet Access Services 3%

Computer Equipment/Soft. 1% Work-At-Home 3%

Work-At-Home 1% Advance Fee Loans 2%

Advance Fee Loans .2% Computer Equipment/Soft. 1%

Magazine Sales .2% Nigerian Money Offers 1%

Information Adult Services .2% Information Adult Services 1%

Travel/Vacations .1% Credit Card Offers .5%

Multilevel Market/Pyramids .1% Travel/Vacations .5%

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Auction Collusion and TricksAuction Collusion and Tricks

ALL auction types can be manipulatedALL auction types can be manipulated Serious problem with trustSerious problem with trust Hence need for escrow, credit, evaluation Hence need for escrow, credit, evaluation

and performance data on participants.and performance data on participants. Rings, cartels and enforcementRings, cartels and enforcement

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Avoiding Fraud in AuctionsAvoiding Fraud in Auctions Understand how the

auction works.

Check out the seller. Check out buyers and shills. Traceroute?

Be especially careful if the seller is a private individual.

Get a physical address and other identifying information.

Ask about delivery, returns, warranties and service.

Be wary of claims about collectibles.

Use common sense to guide you.

Pay the safest way.

Let the auction site know if you have a problem. It is their business.

Make use of http://www.ftc.gov, http://www.fraud.org

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Online Auction trust, ratings and Online Auction trust, ratings and User ProfilesUser Profiles

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Auction StrategiesAuction Strategies

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Try the psychologyTry the psychology

Take the Dutch descending auction flower Take the Dutch descending auction flower market simulation challenge, at:market simulation challenge, at:http://http://auctions.rafaeli.netauctions.rafaeli.net

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Some other things for auctionSome other things for auction Blood, kidneys, wombsBlood, kidneys, wombs

Concluding Thought for the Day

MBAs for Auction?

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Auction resourcesAuction resources

http://www.internetauctionlist.com/http://www.internetauctionlist.com/ the internet auction list the internet auction list

http://www.AuctionAnything.comhttp://www.AuctionAnything.com http://www.ebay.comhttp://www.ebay.com

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Auction resourcesAuction resources

Frictionless Commerce?

MySimon

BotSpot

DealPilot, Nextag.com Froogle.com

for price comparison and haggling

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Israeli auction sites, Israeli auction sites, agents in auctionsagents in auctions

http://www.michraz-Ilmedina.co.ilhttp://www.2bid.co.il

http://www.vshop.co.il/http://www.vshop.co.il/

http://www.priceit.co.il/http://www.priceit.co.il/

http://www.rusure.com/http://www.rusure.com/

http://www.netaction.co.il http://www.4sale.co.il/http://www.4sale.co.il/ http://www.10bid.com/http://www.10bid.com/ http://www.olsale.co.il/http://www.olsale.co.il/ http://www.bigdeal.co.il/http://www.bigdeal.co.il/ http://www.salestorm.co.il/http://www.salestorm.co.il/

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ConclusionsConclusions

Online auctions are becoming extremely popular becauseOnline auctions are becoming extremely popular because

– retailing is moving away from a fixed-price paradigm retailing is moving away from a fixed-price paradigm to negotiation to be able to follow their customers’ to negotiation to be able to follow their customers’ valuations;valuations;

– online auctions have wide geographic reach; online auctions have wide geographic reach;

– automated negotiations are cheaper and faster.automated negotiations are cheaper and faster. It is also a vibrant research area since the research on It is also a vibrant research area since the research on

automated negotiations and their idiosyncrasies has just automated negotiations and their idiosyncrasies has just started. started.