We study the bidding behavior of spiteful agents who, contrary to the common assumption of selfinterest, maximize the weighted difference of their own profit and their competitors’ profit. This assumption is motivated by inherent spitefulness, or, for example, by competitive scenarios such as in closed markets where the loss of a competitor will likely result in future gains for oneself. We der...

In this paper I develop a Prospect theory based model to explain bidding in first-price auctions. As suggested in the literature, bidding occurs in these auctions in an inherently ambiguous environment due to lack of information about bidders’ risk attitudes and bidding strategies. I show that bidding in first-price auctions can be rationalized as a combination of reactions to underlying ambigu...

Online, reverse auctions are increasingly being utilized in industrial sourcing activities. This phenomenon represents a novel, emerging area of inquiry with significant implications for sourcing strategies. However, there is little systematic thinking or empirical evidence on the topic. In this paper, the use of these auctions in sourcing activities is reviewed and four key aspects are highlig...

This paper studies price dispersion and bidder entry in sequential online auctions of indistinguishable items, where goods and shipping costs are identical. Contrary to intuition and the “law of one price,” previous empirical analyses show large price swings among auctions of identical products. To study this phenomenon, this paper performs empirical analysis on a dataset of 3,164 sequential eB...

Auctions, when well designed, result in desirable economic outcomes and have been widely used in solving real-world resource allocation problems, and in structuring stock or futures exchanges. The field of auction mechanism design has drawn much attention in recent years from economists, mathematicians, and computer scientists. In traditional auction theory, auctions are viewed as games of inco...

One view regarding auction duration suggests that longer auctions would result in more bidders and more bids, which in turn would result in higher prices. An opposing view is that shorter auctions might appeal to impatient bidders, or alternatively that shorter duration might lead to more competitive dynamics. To examine these competing notions, we conduct pairwise comparisons of simultaneous a...

Auctions, when well designed, result in desirable economic outcomes and have been widely used in solving real-world resource allocation problems, and in structuring stock or futures exchanges. The field of auction mechanism design has drawn much attention in recent years from economists, mathematicians, and computer scientists. In traditional auction theory, auctions are viewed as games of inco...

The United States now spends around $7 billion on universal service programs—subsidies intended to ensure that the entire country has access to telecommunications services. Most of this money supports telecommunications service in “high cost” (primarily rural) areas, and the High Cost fund is growing quickly. In response to this growth, policymakers are considering using reverse auctions, or bi...