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on Economic Design |
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Issue of 2018‒01‒29
three papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Ali Hortaçsu; Jakub Kastl; Allen Zhang |
| Abstract: | We analyze bidding data from uniform price auctions of U.S. Treasury bills and notes between July 2009-October 2013. Primary dealers consistently bid higher yields compared to direct and indirect bidders. We estimate a structural model of bidding that takes into account informational asymmetries introduced by the bidding system employed by the U.S. Treasury. While primary dealers’ estimated willingness-to-pay is higher than direct and indirect bidders’, their ability to bid-shade is even higher, leading to higher yield/lower price bids. Total bidder surplus averaged to about 3 basis points across the sample period along with efficiency losses around 2 basis points. |
| JEL: | G12 L1 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24024&r=des |
| By: | Yokote, Koji |
| Abstract: | Using a notion of convexity in discrete convex analysis, we introduce a discrete analogue of the Kuhn-Tucker theorem. We apply it to an auction model and show that existing iterative auctions can be viewed as the process of finding a saddle point of the Lagrange function. |
| Keywords: | Auctions; Discrete convex analysis; Kuhn-Tucker theorem |
| JEL: | C78 D44 |
| Date: | 2018–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83811&r=des |
| By: | Yokote, Koji |
| Abstract: | The separation theorem in discrete convex analysis states that two disjoint discrete convex sets can be separated by a hyperplane with a 0-1 normal vector. We apply this theorem to an auction model and provide a unified approach to existing results. When p is not an equilibrium price vector, i.e., aggregate demand and aggregate supply are disjoint, the separation theorem indicates the existence of excess demand/supply. This observation yields a refined analysis of a characterization of competitive price vectors by Gul and Stacchetti (2000). Adjusting the prices of items in excess demand/supply corresponds to Ausubel's (2006) auction. |
| Keywords: | Discrete convex analysis, Separation theorem, Hall's theorem, Auction |
| JEL: | C78 D44 |
| Date: | 2017–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82884&r=des |