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Full-Text Articles in Industrial Organization

Collusive Bidding In The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz May 2014

Collusive Bidding In The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz

Jesse A. Schwartz

This paper describes the bid signaling that occurred in many of the FCC spectrum auctions. Bidders in these auctions bid on numerous spectrum licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to raise the bid on any license. Simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. This “code bidding” occurs when one bidder tags the last few digits of its bid with the market number of a related license. We examine how extensively bidders signaled each other with retaliating bids …

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Second Chance Offers In Auctions, Aniruddha Bagchi, Brett Katzman, Timothy Mathews Dec 2013

Second Chance Offers In Auctions, Aniruddha Bagchi, Brett Katzman, Timothy Mathews

Aniruddha Bagchi

This paper examines situations in which a seller might make a second chance (take-it-or-leave-it) offer to a non-winning bidder at a price equal to their bid at auction. This study is motivated by the take-it-or-leave-it second chance offer rules used by eBay and a number of state procurement agencies. Equilibrium bidder behavior is determined for IPV sealed bid first price, second price, English, and Vickrey auctions when a second chance offer will be made with an exogenous probability p. In all but the Vickrey auction (which elicits the dominant strategy of bidding one’s value) equilibrium bids are lower than if …

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“Selling Licenses For A Process Innovation: The Impact Of The Product Market On The Selling Mechanism, Aniruddha Bagchi Dec 2007

“Selling Licenses For A Process Innovation: The Impact Of The Product Market On The Selling Mechanism, Aniruddha Bagchi

Aniruddha Bagchi

This article considers the sale by a research lab of licences for a cost-reducing innovation. The marginal cost of a firm that wins a licence is private information and the acquisition of a licence imposes a negative externality on the other firms. The lab’s optimal revenue is determined from a class of mechanisms in which the lab selects the number of licences and the reserve price before the sale. The role of the downstream product market in the determination of the number of licences is analyzed. Furthermore, it is also shown that the optimal reserve price may be zero.

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