In this article we report an experiment that examines how demand-side bidding can discipline generators in a market for electric power. First we develop a treatment without demand-side bidding; two large firms are allocated baseload and intermediate cost generators such that either firm might unilaterally withhold the capacity of its intermediate cost generators from the market to benefit from ...

This paper proves that the monotonicity of bidding strategies together with the rationality of bidders implies that the winning bid in a first price auction converges to the competitive equilibrium price as the number of bidders increases (Wilson (1977)). Instead of analyzing the symmetric Nash equilibrium, we examine rationalizable strategies (Bernheim (1984) and Pearce (1984)) among the set o...

We study the online learning problem of a bidder who participates in repeated auctions. With the goal of maximizing his total T-period payoff, the bidder wants to determine the optimal allocation of his fixed budget among his bids for K different goods at each period. As a bidding strategy, we propose a polynomial time algorithm, referred to as dynamic programming on discrete set (DPDS), which ...

This paper examines the bidding for school milk contracts in Florida and Texas during the 1980s. In both states firms were convicted of bid-rigging. The data and legal evidence suggest that the cartels in the two states allocate contracts in different ways: One cartel divides the market among members, while the other cartel also uses side payments to compensate members for refraining from biddi...

Simultaneous ascending auctions present agents with various strategic problems, depending on preference structure. As long as bids represent non-repudiable offers, submitting non-contingent bids to separate auctions entails an exposure problem: bidding to acquire a bundle risks the possibility of obtaining an undesired subset of the goods. With multiple goods (or units of a homogeneous good) bi...

Bidding for multi-items in simultaneous auctions raises challenging problems. In multi-auction settings, the determination of optimal bids by potential buyers requires combinatorial calculations. While an optimal bidding strategy is known when bidding in sequential auctions, only suboptimal strategies are available when bidding for items being sold in simultaneous auctions. We investigate a mul...

The study maps the bidding patterns of 1,051 completed English auctions from the eBay website to study their structural patterns. The overall pattern appears to be a cubic. People initially bid the price to 60– 70% of the final value. The price levels off only to take off near the end of the auction, when it reaches its final price. The second part of the study measures the effects of informati...