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"Benefit auctions."
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Electronic Auctions: Role of Visibility Settings in Transparency Analysis
Purpose: Main objective of the paper is to assess whether the auctions issuers have changed their preferences regarding the auction transparency described through the visibility settings, and to asses which and to what extent had the other auction parameters impact on the auction transparency and also to assess the effect of the transparency onto the achieved auction savings.Methodology/Approach: The paper analyses sample records of 5,000 electronic auctions of SR and CR auction issuers on the time frame of 2009-2016, using methods of higher statistics. An composite index for transparency analysis has been developed and assessed. Two standalone regression models were applied to analyse the papers hypotheses regarding the transparency and auctions’ savings.Findings: The size of the auction described does not have a significant effect on the transparency settings, but the auction complexity does. The most saving generating visibility settings is the visible order of the participants and the visibility of the other measurements settings for the auctions. Increasing the auction complexity can decrease the generated saving by an average 9.3%.Research Limitation/implication: Research was based on real secondary data from one electronic auction provider. The results are limited to the features enabled on this electronic platform. Results show that the application of visibility setting in auctions can generate additional benefits like savings, but also has to be applied carefully when assessing the transparency.Originality/Value of paper: The analysis and results based on real secondary data are scare in the current research area, therefore is this article a valued contribution.
Journal Article
Happy spring
Review(s) of: Happy spring, by Chim Pom from Smappa!Group, Mori Art Museum, Tokyo.
Magazine Article
Art fair report: Full steam ahead
Art fair organizers are braving continuing Covid-19 conditions as they reintroduce physical events where possible. Particularly strong sales for live regional fairs point to the enduring importance of in-person platforms.
Magazine Article
POSITION AUCTIONS WITH CONSUMER SEARCH
This article examines a model in which advertisers bid for \"sponsored-link\" positions on a search engine. The value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about firm qualities and search optimally. Consumer search strategies, equilibrium bidding, and the welfare benefits of position auctions are analyzed. Implications for reserve prices and a number of other auction design questions are discussed.
Journal Article
Keyword Management Costs and “Broad Match” in Sponsored Search Advertising
In sponsored search advertising, advertisers bid to be displayed in response to a keyword search. The operational activities associated with participating in an auction, i.e., submitting the bid and the ad copy, customizing bids and ad copies based on various factors (such as the geographical region from which the query originated, the time of day and the season, the characteristics of the searcher), and continuously measuring outcomes, involve considerable effort. We call the costs that arise from such activities
keyword management costs
. To reduce these costs and increase advertisers’ participation in keyword auctions, search engines offer an opt-in tool called
broad match with automatic and flexible bidding
, wherein the search engine automatically places bids on behalf of the advertisers and takes over the above activities as well. The bids are based on the search engine’s estimates of the advertisers’ valuations and, therefore, may be less accurate than the bids the advertisers would have turned in themselves. Using a game-theoretic model, we examine the strategic role of keyword management costs, and of broad match, in sponsored search advertising. We show that because these costs inhibit participation by advertisers in keyword auctions, the search engine has to reduce the reserve price, which reduces the search engine’s profits. This motivates the search engine to offer broad match as a tool to reduce keyword management costs. If the accuracy of broad match bids is sufficiently high, advertisers adopt broad match and benefit from the cost reduction, whereas if the accuracy is very low, advertisers do not use it. Interestingly, at moderate levels of bid accuracy, advertisers individually find it attractive to reduce costs by using broad match, but competing advertisers also adopt broad match and the increased competition hurts all advertisers’ profits, thus creating a “prisoner’s dilemma.” When advertisers adopt broad match, search engine profits increase. It therefore seems natural to expect that the search engine will be motivated to improve broad match accuracy. Our analysis shows that the search engine will increase broad match accuracy up to the point where advertisers choose broad match, but that increasing the accuracy any further reduces the search engine’s profits.
Journal Article
Transaction Costs, Participation, and the Cost-Effectiveness of Reverse Auctions: Evidence from a Laboratory Experiment
Reverse auctions are often recognized as a tool that can cost-effectively allocate agri-environmental program funds to support environmentally-beneficial land management practices. However, transaction costs can limit participation in auctions which limits their cost-effectiveness. We use a laboratory experiment to examine how various levels of transaction costs influence participation and bidding behavior in discriminatory-price reverse auctions in low and high budget scenarios. Our experimental results show that transaction costs limit auction participation, increase bid amounts, and reduce cost-effectiveness. The negative effect of transaction costs on participation is particularly large when the budget level is low. Using the results of our experiment, we design a simulation to investigate whether reducing transaction costs via subsidies could increase program cost-effectiveness under various conditions. We find that transaction cost subsidies increase auction cost-effectiveness; however, our study raises new questions about how these subsidies are designed and the implications for the overall costs and benefits of efforts to reduce transaction costs in reverse auctions.
Journal Article
Addressing Participant Inattention in Federal Programs: A Field Experiment with the Conservation Reserve Program
Voluntary land conservation programs depend upon the willingness of land owners to participate. Since participation requires commitment to long-term contracts, most studies on participation focus on changes to the pecuniary incentives facing land owners. This study presents a large-scale field experiment within the USDA's Conservation Reserve Program (CRP) that examines whether informational outreach, including behavioral nudges, could improve land owners' willingness to participate. The experiment evaluates the impact of three types of reminder letters on the rate at which land is offered into the CRP. We find that for the most well-informed group, farms with expiring CRP contracts, the reminder letters did improve participation. We interpret this result as evidence of inattentive behavior. We do not detect any differences in the estimated treatment effects among the basic reminder letter and the letters augmented with peer comparisons and social norm messaging, nor do we detect any treatment effect among currently unenrolled farms. From a policy perspective, these results imply that the USDA can generate additional CRP offers among farms with expiring contracts at an average cost of $39 per additional offer. Assuming a twenty-five million acre program, reminder letters sent during every sign-up period would result in re-enrollment offers from an additional 420,000 acres. Using simulations based on offers from prior CRP sign-ups, we estimate that these additional offers in the CRP auction would reduce program costs. Depending on the year of simulation, the outreach effort achieves a benefit-cost ratio of between 20:1 and 90:1.
Journal Article
Implementing the optimal provision of ecosystem services
Many ecosystem services are public goods whose provision depends on the spatial pattern of land use. The pattern of land use is often determined by the decisions of multiple private landowners. Increasing the provision of ecosystem services, though beneficial for society as a whole, may be costly to private landowners. A regulator interested in providing incentives to landowners for increased provision of ecosystem services often lacks complete information on landowners’ costs. The combination of spatially dependent benefits and asymmetric cost information means that the optimal provision of ecosystem services cannot be achieved using standard regulatory or payment for ecosystem services approaches. Here we show that an auction that sets payments between landowners and the regulator for the increased value of ecosystem services with conservation provides incentives for landowners to truthfully reveal cost information, and allows the regulator to implement the optimal provision of ecosystem services, even in the case with spatially dependent benefits and asymmetric information.
Journal Article