Universität zu Köln

Lu, Yixin ORCID: 0000-0001-6515-1940, Gupta, Alok ORCID: 0000-0002-2097-1643, Ketter, Wolfgang and van Heck, Eric (2022). DESIGNING HYBRID MECHANISMS TO OVERCOME CONGESTION IN SEQUENTIAL DUTCH AUCTIONS. MIS Q., 46 (1). S. 457 - 491. MINNEAPOLIS: SOC INFORM MANAGE-MIS RES CENT. ISSN 0276-7783

Full text not available from this repository.

Abstract

A common problem in many mature markets is how to deal with congestion-a situation in which transaction requests from market participants cannot be accommodated in an expedited manner. This paper examines the congestion problem in sequential Dutch auction markets. Transactions in these markets typically involve perishable goods, making market clearing speed crucial. Traditionally, sequential Dutch auctions have been implemented with fast-paced auction clocks that process equally attractive bids in the order they arrive and only award the first bidder as the winner ofeach round, which canlead to serious congestion in case of a demand surge. We propose a hybrid mechanism that capitalizes on the discrete nature of the auction clock and batches together the highest bids, allowing multiple transactions at the same price in each round. To evaluate the performance of the hybrid mechanism, we first develop a game-theoretic model comparing the hybrid mechanism to the traditional sequential Dutch auction mechanism. Our model predicts that the hybrid mechanism will achieve higher operational efficiency without compromising allocative efficiency. We then complement the theoretical analysis by evaluating the hybrid mechanism through a quasi-natural field experiment. The empirical analysis of the field data shows that the hybrid mechanism can significantly speed up the market clearing process and increase price stability without affecting the expected revenue. Our findings shed new light on the design and operation of multi-unit auctions

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 Ketter, Wolfgang UNSPECIFIED UNSPECIFIED UNSPECIFIED van Heck, Eric UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-683179
DOI:	10.25300/MISQ/2022/16472
Journal or Publication Title:	MIS Q.
Volume:	46
Number:	1
Page Range:	S. 457 - 491
Date:	2022
Publisher:	SOC INFORM MANAGE-MIS RES CENT
Place of Publication:	MINNEAPOLIS
ISSN:	0276-7783
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language BUY-IT-NOW; DEMAND REDUCTION; INFORMATION; IMPACT; SPEED Multiple languages Computer Science, Information Systems; Information Science & Library Science; Management Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/68317