Download or read book Essays in Industrial Organization Entry in Multi Object Auctions and Freemium Packages in Two sided Markets written by Renato Zaterka Giroldo and published by . This book was released on 2019 with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first two chapters of this dissertation, I study the design of multi-object auctions. Using a large data set from the Brazilian public procurement sector, I show evidence that entry is costly and that the mix of products being auctioned off is a first-order effect to understand firm participation. In the first chapter, I find evidence that the data is consistent with a theory of selection. The average entrant has a higher product match with the session, and they are closer to auction locations. Distance affects entry decisions negatively: a 1 unit (100km) increase in the distance to the auction location lowers the odds ratio for entry 0.91 times. At the same time, an additional auction in the set of potential auctions of a firm increases the odds for entry 1.62 times. In terms of variable costs, a 1% increase in the distance to the auction location increases bid by 0.4% to 3.3%. There are also gains of scale in terms of the size of the contracts: a 1% increase in the contract quantity for a given product increases bids by 0.64% to 0.76%. The main force responsible for lowering procurement costs is the presence of additional bidders. I find that an extra bidder can lower costs between 21.2% and 32.4%. These results motivate and feed into the structural model presented in chapter 2. In the second chapter, I continue to analyze this market with the focus on estimating entry costs and answering policy questions. To do so, I build a novel model of endogenous entry in multi-object auction sessions that allows me to disentangle two forces that affect entry decisions: entry costs, and the menu of items of a given session. The model has two stages. In the first stage, firms decide whether to enter an auction session and pay a fixed cost after observing an imperfect signal of their true cost. In the second stage, both the items for which they can bid and their costs are realized, and the auction takes place. I focus the analysis on type symmetric equilibria, where bidders of the same type follow the same entry strategy. In equilibrium, marginal bidders make zero profits. This condition allows me to link the unobserved entry costs to the observed bid behavior of entrants. Having derived the equilibrium of the model, I estimate model fundamentals and turn to policy questions. The estimates provide evidence that entry is more attractive to local firms. I find that their cost distribution stochastically dominates the one from non-local firms. Moreover, conditioned on the number of items a firm can participate in, non-local firms face between 3.9% to 6.5% higher entry costs than local firms. I focus on two counterfactual simulations. In the fully efficient scenario, where firms do not incur any entry costs, I find that procurement costs would be lowered by 22.5% to 40.1%. These are bounds on the maximum cost savings and also quantifies the degree of inefficiency present in this market. The second counterfactual is a partially efficient scenario, where non-local firms face the same entry costs as local firms. This analysis focuses on a selected equilibrium where firms enter the sessions sequentially. Firms are sorted according to a lexicographic order which is determined by the strength of their signal, number of items, and firm type (non-local/local). I find that procurement costs would be lowered by 2.8% to 2.9%. Thus, on this type of equilibrium and by holding on-site auctions, the government indirectly sacrificed some efficiency to the benefit of local firms. In the third chapter, I study the pricing of platforms that offer consumers the choice between a free package, in which consumers are exposed to advertising, and a premium package, in which they pay to not be exposed to advertisements. I characterize its profit-maximizing and Pigouvian pricing, which allows me to analyze the degree to which the platform incorporates consumers' distaste for advertising in its pricing scheme, as well as the trade-offs that emerge between the free and paid packages. The results contribute to the discussion of consumers' overexposure to advertising when platforms behave as a social planner and maximize their value.
Download or read book Three Essays on Mechanism Design and Multi object Auctions written by Veronika Grimm and published by . This book was released on 2003-01-01 with total page 101 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Industrial Organization and Auctions written by Ki-Eun Rhee and published by . This book was released on 2004 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Empirical Industrial Organization and Auctions written by Shumpei Goke and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I investigate various aspects of auction design problems. In Chapter 1, I study secret reserve prices in auctions that are partially binding in the sense that the sellers can accept bids below them. Such a reserve price has a bite only when the winning bid exceeds it, in which case the winning bid is accepted without seller's action. This work investigates the motivation for this puzzling practice that many real-world auctions take, such as wholesale used-car auctions. I estimate a structural model of ascending auctions using the auction data in the wholesale used-car market. To microfound seller's decision of the secret reserve price, I posit that the seller has uncertainty as to the value of the item when she sets the reserve price and that this uncertainty is resolved after she observes the auction price. I compare the status quo with two counterfactual auction formats: (i) no reserve prices and the seller gets to accept or reject every winning bid, and (ii) the seller commits to the secret reserve price. I observe very little difference among them in terms of probability of trade, seller's payoff and revenue. I discuss how the current format may be rationalized as reducing transaction costs for asking sellers' confirmation of all winning bids and avoiding sellers' cognitive cost of committing to a reserve price. The work in Chapter 2 is a joint work with Gabriel Y. Weintraub, Ralph A. Mastromonaco, and Samuel S. Seljan. Weintraub and I formulated the research questions and laid out steps for the research project in close collaboration, and I performed all the data analysis with the advice from Weintraub. Mastromonaco and Seljan provided Weintraub and me with the dataset and the necessary domain knowledge. In this work, we study actual bidding behavior when a new auction format gets introduced into the marketplace. More specifically, we investigate this question using a novel dataset on internet display advertising auctions and exploiting a staggered adoption by different publishers (sellers) of first-price auctions (FPAs), instead of the traditional second-price auctions (SPAs). Event study regression estimates indicate that, immediately after the auction format change, the revenue per sold impression (price) jumped considerably for the treated publishers relative to the control publishers, ranging from 35% to 75% of the pre-treatment price level of the treatment group. Further, we observe that in later auction format changes the increase in the price levels under FPAs relative to price levels under SPAs dissipates over time, reminiscent of the celebrated revenue equivalence theorem. We take this as evidence of initially insufficient bid shading after the format change rather than an immediate shift to a new Bayesian Nash equilibrium. Prices then went down as bidders learned to shade their bids. We also show that bidders' sophistication impacted their response to the auction format change. Our work constitutes one of the first field studies on bidders' responses to auction format changes, providing an important complement to theoretical model predictions. As such, it provides valuable information to auction designers when considering the implementation of different formats. In Chapter 3, I study the efficient design of mortgage foreclosure auctions. Lenders with delinquent mortgages recover their lending by foreclosure, which is a legal process to sell the mortgage property via public auction. In the U.S., mortgage lenders are allowed to bid in such foreclosure auctions, and they win in such auctions very frequently. I study the question of why mortgage lenders win in most of those auctions. I develop a theoretical model of ascending auctions with private values. I find that the lender's optimal bidding strategy is the same as the optimal reserve price of an auction seller, if it is below the debt balance. In other words, the lender exercises monopoly power as would an auction seller, up to the remaining debt. This increases the probability that the lender wins the auction, as third-party bidders' optimal strategy is to drop out of the auction when the price reaches their respective valuations of the mortgage property. The monopoly power that the mortgage confers to the lender also implies that the resulting allocation of the mortgage property may be inefficient. To resolve such inefficiency, I derive a mechanism that achieves efficient allocation of the foreclosed property.
Download or read book Essays in Empirical Industrial Organization written by Chi-Yin Wu and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is composed of two essays in the field of Industrial Organization. Specifically, the empirical studies are conducted by focusing on the market structure and competition issues in the airline industry. The first essay investigates entry deterrence through incumbents' pricing strategies in the airline industry. Recent research finds evidence that incumbent airlines tend to cut fares in response to the "threat" of entry by Southwest Airlines. Instead of focusing on the entry threat by a single carrier, this essay re-examines this issue by looking at incumbent airlines' price response when entry is threatened by a wider variety of potential entrant airlines. Results show that incumbents' response vary by the identity of the firm making the threat. As expected, incumbents cut fares in response to the threat of entry by some potential entrants; however, a new result is also found that incumbents may respond by raising their fare depending on who is making the threat. The second essay looks into an antitrust-relevant issue in the airline industry. Proper antitrust analysis often focuses on whether the concerned differentiated products are truly competing with each other. This essay uses a structural econometric model to investigate whether nonstop and connecting air travel products effectively compete with each other. Estimate results suggest that connecting products may be an attractive alternative to nonstop products for leisure travelers but less so for business travelers. If connecting products are counterfactually eliminated, the empirical model predicts small price changes for nonstop products. This suggests that the two product types only weakly compete with each other and can be treated as being in separate product markets for antitrust purposes.
Download or read book Two Essays on Industrial Organization written by Yan Liu and published by . This book was released on 2006 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Industrial Organization and Multi market Contact written by Pak Yee Lee and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Multi object Auctions written by Indranil Chakraborty and published by . This book was released on 1997 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Three Essays on Auction Markets written by Nicholas James Shunda and published by . This book was released on 2008 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Entry exit and flexibility in oligopolistic markets written by Christian Riis and published by . This book was released on 1992 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Empirical Industrial Organization written by Roxana Cecilia Fernández Machado and published by . This book was released on 2017 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Industrial Organization written by Hengheng Lu and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of four chapters in Industrial Organization. Chapter 1 and 3 study optimal business models for digital goods and personalized marketing strategies on online platforms. Chapter 2 and 4 explore agents' heterogeneous performance in the marketplace. In the first chapter, along with the coauthor Jacob LaRiviere, I study optimal business models for video games using data from Xbox. Offering content via bundle-based subscription services has become a prevalent business strategy for media platforms. Despite its popularity, there is limited empirical evidence on whether the subscription model can generate better outcomes for customers and content providers than the traditional a la carte sales model. We answer this question using a novel proprietary dataset from the Xbox video game platform. We develop and estimate a model of demand and supply for individual games and the subscription service Game Pass. We find consumer surplus increases by 16% on average when Game Pass is introduced. The decomposition analysis shows that the bundling and renting features of the subscription service contribute almost equally to the surplus change. We further use the model to study alternative subscription model designs. We find that when all games are offered only via a grand subscription bundle, consumer surplus decreases by 38% from its level under the traditional sales model, with low-usage and slowly-satiated customers being the most affected. However, welfare outcomes can be greatly improved if the platform offers multiple tiers of subscription bundles for different segments of customers. On the supply side, content providers are better off under the subscription-only model if they are compensated with more than 70%--80% of the subscription revenue. In the second chapter, along with coauthors Brad Larsen and Anthony Lee Zhang, I study mediators' heterogeneous performance in the bargaining of used cars. We analyze data on tens of thousands of alternating-offer, business-to-business negotiations in the wholesale used-car market, with each negotiation mediated (over the phone) by a third-party company. The data shows the identity of the employee mediating the negotiations. We find that who intermediates the negotiation matters: high-performing mediators are 22.03 percentage points more likely to close a deal than low performers. We provide a decomposition of mediator impact and a structural model of intermediated incomplete-information bargaining. We find that effective mediators improve bargaining outcomes by helping buyers and sellers come to agreements faster, not by pushing disagreeing parties to persist, and have real effects on efficiency for some negotiations, overcoming some of the inefficiency inherent in incomplete-information settings. In the third chapter, along with coauthors Fan Zhang and Zhijie Lin, I study consumers' variety-seeking preferences and explore its implications on the design of recommendation algorithms using data from a food delivery platform. We first document that a substantial fraction of consumers is variety-seeking: they are willing to pay 19.9% more on average for switching to a different seller at the next purchase. We then study how targeted marketing strategies that account for this preference affect the platform participants. In the counterfactual analysis, we find that personalizing seller ranks based on consumers' order history and their variety-seeking preference increases revenue by 18% and consumer surplus by 14%. Furthermore, we find that the existence of consumers' variety-seeking preferences softens the price competition. Our simulated optimal targeted pricing strategy implies an increase in prices for rival sellers' consumers and a decrease in prices for the sellers' own consumers. In the fourth chapter, along with the coauthor Xinyao Qiu, I explore the gender gap in business performances among freelancers selling home-cooked meals, an area that is traditionally perceived as female-typed and involves complicated business strategy-making. Using high-quality proprietary data from a Chinese P2P online food ordering platform, we document a 12% gender gap in sellers' daily revenues. Factors highlighted in the existing literature such as working hours and experience narrow the gap by 63%. The remaining gap can be explained by male and female freelancers adopting different business strategies in pricing, positioning, and market expansion.
Download or read book Essays on Competitive and Strategic Bidding in Multi object Auctions written by Simon Finster and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Double Auction Market written by John Rust and published by Routledge. This book was released on 2019-05-07 with total page 456 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of papers focuses on markets organized as double auctions (DA). In a double auction, both buyers and sellers can actively present bids (offers to buy) and asks (offers to sell) for standardized units of well-defined commodities and securities. A classic example of a DA market (known by practitioners as an open outcry market) is the commodity trading pit at the Chicago Board of Trade. A related process is a call market, which is used to determine opening prices on the New York Stock Exchange. Already the predominant trading institution for financial and commodities markets, the double auction has many variants and is evolving rapidly in the present era of advancing computer technology and regulatory reform. DA markets are of theoretical as well as practical interest in view of the central role these institutions play in allocating resources. Although the DA has been studied intensively in the laboratory, and practitioners have considerable experience in the field, only recently have tools started to become available to provide the underpinning of a behavioral theory of DA markets. "
Download or read book Essays in Industrial Organization Intermediation Marketing and Strategic Pricing written by Sebastian Wismer and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Three Essays on Multi round Procurement Auctions written by Lu Ji and published by . This book was released on 2006 with total page 113 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation contributes to auction studies. It analyzes the bidding behavior in multi-round auctions. It is motivated by an interesting multi-round feature observed in the procurement auctions held by the Indiana Department of Transportation (INDOT hereafter), which adopts secret reserve prices. Prior research has indicated that auctions with reserve prices usually lead to no trade. However, prior research has not paid much attention to the possibility that the seller can auction unsold objects from previous rounds and a trade is therefore still likely to occur. My dissertation provides new theoretical and empirical analyses of auctions with multiple rounds. It first develops a game-theoretic bidding model for the multi-round auctions with non-forward looking bidders. It then establishes a structural econometric model in order to conduct a structural analysis of the INDOT data. Lastly it introduces dynamic features into the model by assuming that bidders are forward looking and uses a dynamic control approach to analyze the bidding behavior and policy issues. The main findings are: (1) rational bidders reduce their markup across periods in multi-round auctions; (2) simulations show that using secret reserve price is sometimes better than public reserve price for the procurement auctioneer; (3) counterfactual analyses indicate that on one hand, when bidders are not forward looking, it is better for the INDOT to use a secret reserve price; on the other hand, when bidders are forward looking, it is better for the INDOT to use a secret reserve price when the discount factor is low and to use a public reserve price when the discount factor is sufficiently high.
Download or read book Essays in Industrial Organization written by Chun-Hui Miao and published by . This book was released on 2006 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt:
