Universität zu Köln

Lu, Yixin ORCID: 0000-0001-6515-1940, Gupta, Alok ORCID: 0000-0002-2097-1643, Keller, Wolfgang and van Heck, Eric (2019). Dynamic Decision Making in Sequential Business-to-Business Auctions: A Structural Econometric Approach. Manage. Sci., 65 (8). S. 3853 - 3877. CATONSVILLE: INFORMS. ISSN 1526-5501

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Abstract

We develop a dynamic structural model of competitive bidding in multiunit sequential business-to-business auctions. Our model accounts for two notable characteristics of these auctions: (i) bidders have multiple purchase opportunities for the same product, and (ii) winning bidders in each round can acquire multiple units of the same product. We apply the model to bidding data from the world's largest flower wholesale market at which trades are facilitated through fast-paced, sequential, Dutch auctions. Using a two-step estimation approach, we are able to recover the structural parameters effectively and efficiently. We then conduct policy counterfactuals to evaluate the performance of alternative design choices. The results suggest that the current auction practice still has ample room for improvement. In light of this, we propose an optimization framework that can facilitate auctioneers' decisions in making the trade-off between revenue maximization and operational efficiency.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Lu, Yixin UNSPECIFIED orcid.org/0000-0001-6515-1940 UNSPECIFIED Gupta, Alok UNSPECIFIED orcid.org/0000-0002-2097-1643 UNSPECIFIED Keller, Wolfgang UNSPECIFIED UNSPECIFIED UNSPECIFIED van Heck, Eric UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-145628
DOI:	10.1287/mnsc.2018.3118
Journal or Publication Title:	Manage. Sci.
Volume:	65
Number:	8
Page Range:	S. 3853 - 3877
Date:	2019
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-5501
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language ONLINE AUCTION; NONPARAMETRIC-ESTIMATION; EMPIRICAL-MODELS; PRICE; MULTIUNIT; IDENTIFICATION; MANAGEMENT; FRAMEWORK; BIDDERS; AGENTS Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/14562