BIDDING FOR PARKING: The Impact of University Affiliation on Predicting Bid Values in Dutch Auctions of On-Campus Parking Permits
By Grant Kelly
Parking is often underpriced and expanding its capacity is expensive; universities need a better way of reducing congestion outside of building costly parking garages. Demand based pricing mechanisms, such as auctions, offer a possible solution to the problem by promising to reduce parking at peak times. However, faculty, students, and staff at universities have systematically different parking needs, leading to different parking valuations. In this study, I determine the impact university affiliation has on predicting bid values cast in three Dutch Auctions of on-campus parking permits sold at Chapman University in Fall 2010. Using clustering techniques crosschecked with university demographic information to detect affiliation groups, I ran a log-linear regression, finding that university affiliation had a larger effect on bid amount than on lot location and fraction of auction duration. Generally, faculty were predicted to have higher bids whereas students were predicted to have lower bids.
Advisor: Alison Hagy, Allan Collard-Wexler, Kent Kimbrough | JEL Codes: C38, C57, D44, R4, R49 | Tagged: Auctions, Parking, University Parking, Bidder Affiliation, Dutch Auction, Clustering
Collusion with Three Bidders at First-Price Auctions
By Andrew Born
Lopomo, Marx, & Sun (2009) show that, given a speci fied environment, pro table collusion is not possible for a two-person bidding ring operating at a fi rst-price sealed-bid auction. This research investigates the rigor of their result by expanding the theoretical framework to the case of a three-bidder cartel. The output generated from the linear programming model con firms the authorsearlier result. This is a key finding as it is the first to establish a basis for comparison of equilibrium surplus scenarios among multiple-bidder auction formats. The analytic and numerical results pave the way for future research examining the effect of cartel size on profi tability and have many real-world implications for both private and public policy alike.
Advisor: Leslie Marx | JEL Codes: C57
Strategic Behavior in Online Auctions: An Analysis of Sniping
by Claudia Lai
Abstract
Sniping is a prevalent phenomenon in eBay auctions, which have a fixed end time. Such
practice seems apparently inconsistent with standard auction theory – last minute bids are
received with reduced probability, and should rationally be submitted earlier – yet
previous literature has shown that bidders typically do not engage in early bidding, or if
they do, submit low valued bids that they then raise at the last minute. Modeling of the
sniping strategy in a game theoretical framework has been limited to games under
abstract assumptions not applicable to the conditions under which the eBay bidding game
is typically played. This paper intends to carry out analysis within a more general, more
applicable framework, and finds that sniping is a collusive strategy that players engage in
to prevent price inflation of an auctioned item, and weakly dominates engaging in
bidding one’s valuation early, so long as late bids are received with sufficiently high
probability.
Professor Daniel Graham, Faculty Advisor
JEL Codes: C57
Analysis of Auction Price Risk: An Empirical Study of the Australian Aboriginal Art Market
by Ilya Voytov
Abstract
Auction theory economists have shown that auctions can be structured to maximize
the expected revenue to the seller. In this thesis, I show that they can also be
optimized to minimize the sellers’ risk through an understanding of the driving factors
behind seller’s auction price risk. I derive a general form equation for auction price
variance, and discuss how changes in the number of bidders and the type of bidders
affect the sellers’ auction risk. An empirical component of this paper takes data from
auction sales of Australian Aboriginal art and uses observed price variance to make
deductions about the underlying types of participating bidders.
Professor Neil De Marchi, Faculty Advisor
JEL Codes: C57, D44, D53, N27,
