Abstract
We develop extensions to auction theory results that are useful in real life scenarios.
1. Since valuations are generally positive we first develop approximations using the log-normal distribution. This would be useful for many finance related auction settings since asset prices are usually non-negative.
2. We formulate a positive symmetric discrete distribution, which is likely to be followed by the total number of auction participants, and incorporate this into auction theory results.
3. We develop extensions when the valuations of the bidders are interdependent and incorporate all the results developed into a final combined realistic setting.
4. Our methods can be a practical tool for bidders and auction sellers to maximize their profits. The models developed here could be potentially useful for inventory estimation and for wholesale procurement of financial instruments and also non-financial commodities.
All the propositions are new results and they refer to existing results which are stated as Lemmas.
1. Since valuations are generally positive we first develop approximations using the log-normal distribution. This would be useful for many finance related auction settings since asset prices are usually non-negative.
2. We formulate a positive symmetric discrete distribution, which is likely to be followed by the total number of auction participants, and incorporate this into auction theory results.
3. We develop extensions when the valuations of the bidders are interdependent and incorporate all the results developed into a final combined realistic setting.
4. Our methods can be a practical tool for bidders and auction sellers to maximize their profits. The models developed here could be potentially useful for inventory estimation and for wholesale procurement of financial instruments and also non-financial commodities.
All the propositions are new results and they refer to existing results which are stated as Lemmas.
| Original language | English |
|---|---|
| Pages (from-to) | 452-481 |
| Journal | Research in Economics |
| Volume | 72 |
| Issue number | 4 |
| Online published | 21 Sept 2018 |
| DOIs | |
| Publication status | Published - Dec 2018 |
Bibliographical note
Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).Research Keywords
- Auction
- First price sealed bid
- Strategy
- Valuation
- Uncertainty
- Log-normal
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