Meeting Minutes - 14 January 2009

Today I presented an overview of the priorly discussed articles on Dutch auctions. The following articles were discussed:

• Van den Berg and Van der Klauw, 2008. A Structural Empirical Analysis of Dutch Flower Auctions
• Katok and Kwasnica, 2008. Time is money: The effect of clock speed on seller’s revenue in Dutch auctions
• Carare and Rothkopf, 2005. Slow Dutch Auctions

There was a discussion on what we can learn from the theoretic models as modeled in these articles when building a theoretic model for super fast auctions as in the DFA.

• It was noted that the DFA has sequential auctions, which means that the cost of returning to the auction exists but not at the level of an individual auction.
• It was noted that 'Competitive Arousal' as discussed in Katok and Kwasnica exists in a different form in super fast auctions, since it is unlikely that within an individual auction levels of arousal differ.
• It was agreed that 'competitive arousal' in fast auctions could very well be a function of time, possibly not linear per se but this could be a good first start for building a model. Futhermore, the issue of arousal for experience was discussed because bidders who have been trading for years might not be influence very much by emotions.

Peter

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.

Meeting Minutes – 26 November 2008

Today, Paul R. Schrater a guest researcher from University Minnesota, has made a presentation about active preference learning topics. He explained a topic of probability model in which an agent can derive a continous valuation formula which is a result from learning algorithm from a set of discrete data. He tried to explained the algorithm which can decide what approximate formula can be presented to an individual in order to find the projected result that they value highly in as few trial as possible, without making an accurate model the entire valuation surface.



About the presenter,

Paul R. Schrater hold a joint faculty position at the University of Minnesota, in the departments of Psychology and Computer Science. His current research interests generally involve using probabilistic methods to study issues in perception and motor control. He received his Ph.D. from the Department of Neuroscience of the University of Pennsylvania, under David Knill, then of the Department of Psychology and Eero Simoncelli in the GRASP Laboratory who at that time had a primary appointment in the Department of Computer Science at Penn. His dissertation involved a psychophysical and ideal observer analysis of local motion processing.

Meeting Minutes - 19 November 2008

Today, the LARGE session has had a very nice presentation from Carsten Block, a ready to finish doctoral candidate of Information & Market Engineering department, TU Karlsruhe Germany. At our session he presented the topic of "Market-Based Control and Agent-Based Trading in Combined and Power Grids." which is pretty much the topic which has been the area of his doctoral specialization.

The background of the research is the emerging trends of the energy supply which is no longer in hierarchical setup of up down (e.g. from the source to household) distribution, but also in the reversal direction. So that not only the source can sell their energy to the downstream but also the downstream line if they produce energy, the downstream costumer can also sell their energy to the upstream.

This issue of developing two ways of distribution is explained pretty much from different perspectives. But especially, since the energy transaction mechanism between the upstream and the downstream mechanism is built in the agent based point of view and also the mechanism of transaction is involving auction mechanism, so a lot of things what Carsten have applied in his research pretty much coherent with the LARGE field. This session off course has brought big lesson fur the group.

The discussion of this reversible energy transaction is pretty much done in multiple perspectives, since in this session a lot of people come from different area of specialization (e.g. economics, business network, information and decision sciences, etc). Carsten did an excellent explanation also to the multi-background viewer’s questions.

Since Carsten have a strong computer science background, he also shared some of his experiences (e.g. tool for development) in the development of his project. He introduced us a new tools for faster software development like grailsTM and make some demo also about what the platform advances. This session was very successful and everybody was enthusiastic.

Meeting Minutes - 12 November 2008

Today Uzay Kaymak gave a presentation on the Ming Hua and Nicholas Jenning's paper of "Designing a Successful Trading Agent: A Fuzzy Set Aproach".

The paper tells us about the writers experience in implementing fuzzy logics in their SouthamptonTAC agent.

SouthhamptonTAC agent participated successfully in the first and second (TAC) Trading Agent Competition, a competition which facilitates the competition of the participant's "travel" agents in fulfilling their customer demand of travel package (flight ticket, hotel, and extra entertainment ticket). Those participating agents should compete with each other in different (flight ticket, hotel, and extra entertainment ticket) auctions provided by the TAC platform to statisfy the demand of the agent's costumer.

Uzay briefly explains how the SouthamptonTAC implements the fuzzy logics in the hotel, ticket, and entertaiment bidding actions. He (Uzay) found it quiet surprising how the performance of the fuzzy rules implementation can work well on the competition.

The presentation, is wrapped up by a small discussion about the competition conditions. Wolf gives the audience some description about the condition of the TAC competition (The rounds, the finalists, etc.).