Auction model

McAfee (1992) proposes a double auction model that explicitly considers the role of an intermediary who intervenes in the trade and keeps track of supply and demand at asked and bid prices. Like the market specialist in NYSE, the intermediary makes a profit by regulating the trade using a certain mechanism. In the following, we describe this double auction as a direct revelation mechanism. 

Milgrom and Weber (1982) describes a variant of the English Auction where the price is posted electronically. All bidders are active at price zero. The price is raised continuously, and a bidder who wishes to remain active at the current price must depress a button. When she releases the button, she is dropped out of the auction. No bidders who has dropped out can become active again. After any bidder withdraws, all remaining bidders know the price at which she drops out. When there is only one bidder left in the room, the auction ends. McAfee (1992) proposes an oral double auction work in a similar fashion, but with multiple buyers and sellers. In the following, we use the oral double auction model to characterize the basic functions of exchange coordination carried out by a market intermediary (see Figure 3.4). 

Automated Negotiation and Peer-to-Peer Distribution Systems. Auction models allow an Internet user to assume the role of a buyer using either the... 

Electronic marketplace/E-commerce In addition to the many databases available and person-to-person contacts, E-commerce in plastics has been conducted through suppliers web sites or the dot-commerce independent web sites that link material buyers with sellers in transactions or auction formats. During the year 2000 five plastic producers/suppliers and various elastomer producers/suppliers created a new and important business model of a joint-venture web site. It provides multiple companies to join forces to do business. This is a strategy some observers call competition and others regard as just another form of selling in. an electronic format. Regardless of how it is perceived, the model will help propel e-commerce into the mainstream of processor procurement due to the size and wealth of the companies involved. The plastic model example is the largest online business-to-business site todate. 

Marquez, AC, Blanchar C (2004) The procurement of strategic parts. Analysis of contracts with suppliers using a system dynamics simulation model. International Journal of Production Economics 88 (1) 29-49 Mason S (2002) Simulation software buyer s guide. HE Solutions May 45-51 McAfee R, McMillan J (1987) Auctions and Bidding. Journal of Economic Literature 25 699-738... 

The simulation results for GB presented in this section assume that all power stations receive, for free, an allowance of 0.35 tC02 per MWh electricity produced in the preceding compliance period. This benchmark is phased out linearly so that by 2023 no further allocation is received. In the model it is also assumed that GB is small relative to the European market, such that even with changing GB emissions, the C02 price stays at 20/tCO2. The simulation results in Figure 4 show that the electricity price increases, but by far less than in the auction case. 

Compared to auctioning or grandfathering, all these features constitute an incentive for firms to increase their production level. Unfortunately, modelling the precise features of all 25 NAPs would be very difficult the allocation methods differ across Member States, and the NAPs for 2008-2012 are not yet decided. Instead we shall model two extreme cases, knowing that the actual allocation method in the EU ETS stands somewhere in between them ... 

This trend is likely to continue (and possibly accelerate) with the emergence of e-commerce and its market-making models such as exchanges and reverse auctions. The only areas that appear safe are those true specialties where suppHers have a unique technology or product. 

The three models—portals, cybermediaries, and auction markets—represent different solutions to tackling these problems ... 

First-in-first-out (FIFO), 1521, 2157, 2167 First Man program, 1112 First price auctions, 274 First-principle models of human behavior, 2413-2414. See also Man-Machine Integrated Design and Analysis System (MIDAS)... 

Keywords Software agents Auctions Agent-based computational economics ACE Agent-based modelling ABM Automated trading Computational finance ExPo Exchange portal Assignment... 

There are many GT concepts, but this chapter focuses on concepts that are particularly relevant to SCM and, perhaps, already found their applications in the literature. We dedicate a considerable amount of space to the discussion of static non-cooperative, non-zero sum games, the typQ of game which has received the most attention in the recent SCM literature. We also discuss cooperative games, dynamic/differential games and games with asym-metric/incomplete information. We omit discussion of important GT concepts covered in other chapters in this book auctions in Chapters 5 and 7 and principal-agent models in Chapter 4. 

The winner determination for supply curve auctions can also be written as a set covering problem as shown Eq. (5.11) using a Dantzig-Wolfe type decomposition [39]. To use a set covering model we introduce the concept of supply... 

Experimental results demonstrate the advantages of indirect over direct mechanisms for a model of the valuation problem in which an agent can refine bounds on its value for bundles during an auction [73, 76]. Related work... 

As a special case, we get the celebrated revenue-equivalence theorem [100, 65], which states that the most popular auction formats, i.e. English, Dutch, first-price sealed-bid and second-price sealed-bid, all yield the same price on average in a single item allocation problem with symmetric agents. This is an immediate consequence because these auctions are all efficient in the simple private values model. 

Our examination of optimal auctions will be limited to the following simple setting, called the independent private value model. 

The unsatisfactory feature of this setup is the common prior assumption. It is difficult to believe that the auctioneer and the bidders can express their beliefs about others valuations probabilistically, let alone agree upon that belief. It (or something like it) is unavoidable. If the values that bidders have for the object are unknown to the auctioneer, then that uncertainty must be modeled. If the auction is such that how a bidder behaves depends on how she thinks... 

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