Meeting Minutes - 6 May 2009

At 6th of May, we have a guest speaket from TU-Delft. His name is Mathijs de Weerdt. He presented his ACM paper regarding the Qualitative Vickrey Auction concept. A concept at which bidders and auctioneers (centers by his definition) put the agreement of the bid not based on the monetary value (highest or lowest price) but based on the offer demand attributes suitability rank.

He explained this concept in the reversed auction environment example. A concept at which the auctioneer has already defined the rank of offers preferences (the offer contains of many attributes). And the bidder that submits the offer of highest rank wins. The winner bidder then can choose to deliver the offer ranges from his bid point offer to the second highest bidder point offer (Vickrey Auction).

Nice concept, based on the attributes rank preferences. For more explanation you are welcomed to browse our site to download the paper directly (http://large.rsm.nl/meetings.xml).

Meeting Minutes - 7 January 2009

Today I discussed the paper entitled "Slow Dutch Auctions" by Octavian Carare and Michael Rothkopf (Management Science, 51(3), 365-373, 2005). These are a few of the issues that were raised during the discussion:

• Is it realistic to think that the results of Lucking-Reiley (1999) may be due to transaction costs? Aren't there other more plausible explanations (e.g., some form of bounded rationality)? Aren't transaction costs too low to have a significant effect?
• Why do the authors assume randomly arriving bidders in their game-theoretic analysis? What are the implications of this assumption?
• How would the analysis in the paper change if we take into account that there can be many auctions (simultaneously or sequentially) of similar objects? This may create competition among auctioneers. What effect can be expected from this?
• Should we regard the results in the paper as surprising or not? Do they make sense intuitively? Can the analysis be generalized?
• In what way can agent-based research contribute to our understanding of auction mechanisms? What could be the added value of agent-based research over game-theoretic and experimental research?

Ludo

Meeting Minutes - 18 December 2008

Today, I (Meditya Wasesa)have presented a working paper entitled "Time is money: The Effect of Clock Speed on Seller's Revenue in Dutch Auction" written by Elena Katok and Anthony M. Kwasnica of Department of Economics of Smeal College of Business, Penn State University.

The paper presents an experiment and a formula that show the correlation between the clock speed and the sellers revenue in dutch auction. In brief, slower clock speed brings lower revenue, and faster clock speed brigs higher revenue. They have built a nice simple formula that explains this phenomenon by the use of the monitoring cost and the non monetary enjoyment, as the time affected parameters as important factors that affect the end revenue.


In the discussion, the group discussed troughly about the experiment settings that this paper utilized. We tried to analized the pros and the cons about the settings and the formulation which we want to extend at our proposed dutch flower auction experiment.

Meeting Minutes - 3 December 2008

Today, I (Meditya Wasesa) have presented a working paper entitled “A Structural Empirical Analysis of Dutch Flower Auction” written by Gerard van der Berg and Bas van der Klaauw of Department of Economics of Free University Amsterdam.

The paper goals are to define the bidders valuation, determine the optimal seller's reserve value, and see the effect of reserve value adjustment (changing the value of current reserve value to the calculated reserve value) to the corresponding revenue. It is presumed that by adjusting the existing reserve value to an optimized value, a higher revenue could be gained.

The one that is interesting, the authors did not only observed the winning bids record, but also the losing bids (in an interval up to 1 second). Similar previous papers usually only consider the winning bids in their model. They believe that this extra observation could improve their prediction on the distribution of private values of the bidders. The other thing that the writers did is that they use a markov chain monte-carlo and gibbs sampling in the projection of the private values of the bidder.

In general, the flow of the research can be presented as the scheme above. First they observe the recorded data (winning and losing bids). Second they try to mimic the historical data to a valuation distribution of bidders by using the a markov chain monte-carlo and gibbs sampling (they do this step in 4 scenarios). Third then they calculate the optimal reserve bid and also the corresponding delta of revenue. By their finding the increment of the reserve price will not bring big change to the increase of the revenue.

However the conclusion of this paper is not final yet, the team planned to have another discussion about this paper in some other time to really grasp the essence of the paper.