We introduce a class of mechanisms, called bidding clubs, that allow agents to coordinate their bidding in auctions. Bidding clubs invite a set of agents to join, and each invited agent freely chooses whether to accept the invitation or whether to participate independently in the auction. Agents who join a bidding club first conduct a “pre-auction” within the club; depending on the outcome of t...

The purpose of Medicare's Demonstration of Competitive Bidding for Clinical Laboratory Services is to determine whether competitive bidding can be used to provide quality laboratory services at prices below current Medicare reimbursement rates. Here, we present key features of the preliminary design for the demonstration. The following areas are covered: scope of the demonstration, bidding proc...

Competitive bidding to derive Medicare fees promises several advantages over administered fee systems. The authors show how incentives for cost savings, quality, and access can be incorporated into bidding schemes, and they report on a study of the clinical laboratory industry conducted in preparation for a bidding demonstration. The laboratory industry is marked by variable concentration acros...

We study variations on combinatorial games in which, instead of alternating moves, the players bid with discrete bidding chips for the right to determine who moves next. We consider both symmetric and partisan games, and explore differences between discrete bidding games and Richman games, which allow real-valued bidding. Unlike Richman games, discrete bidding game variations of many familiar g...

The online implementation of traditional business mechanisms raises many new issues not considered in classical economic models. This partially explains why online auctions have become the most successful but also the most controversial Internet businesses in the recent years. One emerging issue is that the lack of authentication over the Internet has encouraged shill bidding, the deliberate pl...

In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf. Steinhaus (1948)). This procedure was designed to effi ciently and fairly allocate multiple indivisible items when participants report their valuations truthfully. In equilibrium, players do not follow truthful bidding strategies. We find that, expost, the equilibrium allocation is still effi cient,...

In electronic markets, seller information is often obscured or unavailable, which current theories of reputation and opportunism contend will motivate opportunistic behavior. We investigate how reputable and opportunistic behaviors are motivated in online auctions. This exploratory study examines irregular bidding, which occurs when a bidder makes a bid for an item in an auction, yet that bidde...

Merger Wars: Bidding for Complementary Assets By Lynne M. Pepall and Daniel J. Richards Department of Economics Tufts University Medford, MA 02155 e-mail: [email protected] [email protected] We examine the bidding competition for a set of complementary assets arising between two firms who also compete in a differentiated product market. The bidding contest takes the form of an acquisi...

We analyze bidding behavior in auctions when risk-averse buyers bid for a good whose value is risky. We show that when the risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk premium. Ceteris paribus, buyers will be better off bidding for a more risky object in first price, second price, and English auctions with affiliated com...

In this paper, particle swarm optimization algorithm is proposed to determine the optimal bidding strategy in competitive auction market. The market includes generating companies (Gencos), large consumers who participate in demand side bidding, and small consumers whose demand is present in aggregate form. By using previous bidding data and multi-round auction process, the optimal bidding strat...