UMD Theses and Dissertations

Permanent URI for this collectionhttp://hdl.handle.net/1903/3

New submissions to the thesis/dissertation collections are added automatically as they are received from the Graduate School. Currently, the Graduate School deposits all theses and dissertations from a given semester after the official graduation date. This means that there may be up to a 4 month delay in the appearance of a given thesis/dissertation in DRUM.

More information is available at Theses and Dissertations at University of Maryland Libraries.

Browse

Search Results

Now showing 1 - 5 of 5
  • Thumbnail Image
    Item
    Essays on Speculation, Joint Bidding, and Dynamic Entry in Auctions
    (2023) Deng, Shanglyu; Ausubel, Lawrence; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
    This dissertation consists of three essays on auction design. In Chapter 1, I provide an introduction for the following chapters. In Chapter 2, I examine speculation in procurement auctions, where speculators may have the incentive to acquire items from multiple sellers prior to the auction in order to increase their market power and reduce competition during the auction. I show that the profitability of the speculation scheme hinges on the auction format: Speculation always generates a positive expected profit in second-price auctions but could be unprofitable in first-price auctions. This comparison in profitability is driven by different competition patterns in the two auction mechanisms. In terms of welfare, speculation causes private value destruction and harms efficiency. Sellers benefit from the acquisition offer made by the speculator. Therefore, speculation comes at the expense of the auctioneer. In Chapter 3, I consider a procurement setting where suppliers may be functionally complementary, meaning they need to collaborate to complete a complex project. I compare two methods for incorporating complementary firms into procurement auctions: allowing them to bid jointly or using combinatorial auctions, such as the VCG auction, to coordinate their collaboration. The joint bidding approach leads to a double marginalization problem, as the prime contractor must elicit private cost information from subcontractors, and then submit a bid on behalf of the group. Consequently, the joint bidding approach often underperforms the VCG auction in several aspects, including efficiency, procurement price, and support for small businesses. Chapter 4 presents both theoretical and empirical analyses for recurring auctions. Auctions for durable assets, such as land, house, or artwork, are commonly recurring, as the seller often holds a subsequent auction after a previous attempt fails. Theoretical results show that recurring auctions outperform single-round auctions in terms of efficiency and revenue when potential buyers face costly entry. This occurs because recurring auctions allow potential buyers with different values to enter at different times, which generates savings in entry costs and increases the overall probability of sale. Additionally, optimal reserve price sequences are derived for recurring auctions based on whether the seller aims to maximize efficiency or revenue. In the empirical analysis, the theory is applied to home foreclosure auctions in China, where foreclosed homes are auctioned up to three times in a row. The study identifies the structural parameters in a recurring auction model and compares the observed recurring auctions to counterfactual single-round auctions. The results are in line with theoretical predictions, showing a significant improvement in efficiency and revenue for recurring auctions over single-round auctions. Using the optimal reserve price sequences derived from our model can further enhance the performance of recurring auctions in practice.
  • Thumbnail Image
    Item
    Learning and Robustness With Applications To Mechanism Design
    (2022) Curry, Michael Jeremiah; Dickerson, John P; Goldstein, Thomas; Computer Science; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
    The design of economic mechanisms, especially auctions, is an increasingly important part of the modern economy. A particularly important property for a mechanism is strategyproofness -- the mechanism must be robust to strategic manipulations so that the participants in the mechanism have no incentive to lie. Yet in the important case when the mechanism designer's goal is to maximize their own revenue, the design of optimal strategyproof mechanisms has proved immensely difficult, with very little progress after decades of research. Recently, to escape this impasse, a number of works have parameterized auction mechanisms as deep neural networks, and used gradient descent to successfully learn approximately optimal and approximately strategyproof mechanisms. We present several improvements on these techniques. When an auction mechanism is represented as a neural network mapping bids from outcomes, strategyproofness can be thought of as a type of adversarial robustness. Making this connection explicit, we design a modified architecture for learning auctions which is amenable to integer-programming-based certification techniques from the adversarial robustness literature. Existing baselines are empirically strategyproof, but with no way to be certain how strong that guarantee really is. By contrast, we are able to provide perfectly tight bounds on the degree to which strategyproofness is violated at any given point. Existing neural networks for auctions learn to maximize revenue subject to strategyproofness. Yet in many auctions, fairness is also an important concern -- in particular, fairness with respect to the items in the auction, which may represent, for instance, ad impressions for different protected demographic groups. With our new architecture, ProportionNet, we impose fairness constraints in addition to the strategyproofness constraints, and find approximately fair, approximately optimal mechanisms which outperform baselines. With PreferenceNet, we extend this approach to notions of fairness that are learned from possibly vague human preferences. Existing network architectures can represent additive and unit-demand auctions, but are unable to imposing more complex exactly-k constraints on the allocations made to the bidders. By using the Sinkhorn algorithm to add differentiable matching constraints, we produce a network which can represent valid allocations in such settings. Finally, we present a new auction architecture which is a differentiable version of affine maximizer auctions, modified to offer lotteries in order to potentially increase revenue. This architecture is always perfectly strategyproof (avoiding the Lagrangian-based constrained optimization of RegretNet) -- to achieve this goal, however, we need to accept that we cannot in general represent the optimal auction.
  • Thumbnail Image
    Item
    Essays on Auction Theory and Application
    (2019) Tu, Shunjie; Vincent, Daniel; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
    This dissertation contributes to auction theory with application of the theory to the analysis of some real-life problem. In Chapter 1, I study the problem of competition between contest designers where they offer differentiated prizes to a group of contestants with some minimal effort requirements. The equilibrium among contestants is either a separating equilibrium, where strong contestants participating in high-prize contest and weak contestants in low-prize contest, or a mixing equilibrium, where strong players participate in high-prize contest with probability 1, middle-type players randomize between the two contests, and weak players go to low-prize contest with certainty. I then solve an equilibrium of contest designers where one designer's choice of minimal effort level is assumed to be non-strategic. Finally, I provide conditions such that the assumed non-strategic choice of minimal effort level is optimal and thus characterize at least part of the equilibrium set, which expands the knowledge on competing auctions. In Chapter 2, I apply auction theory to analyze the effect of a merger on firms’ research and development (R&D) investment. There is a substantial literature on the effects of mergers on product prices, but the effects of mergers on other outcomes, such as R&D investment spending, are less studied. I develop a model for evaluating the likely effects of a merger (or joint research venture) on the R&D efforts of competing firms. The R&D process is modeled as an all-pay contest (auction) among firms, with the payoff from investment going to the firm that invests the largest amount. I provide an explicit characterization of the equilibrium in a multi-player asymmetric all-pay contest model. The equilibrium solution then is applied through simulation to calibrate the effects of mergers on firms’ R&D efforts and efficiency as well as on social welfare. I find that each firm is expected to exert more efforts after a merger, but if there are only few firms premerger, a merger reduces total R&D effort. A merger may also cause inefficiency, but the loss in efficiency is low. My results also show that net surplus increases after a merger if the number of firms is small. In Chapter 3, I study a problem of sequential auctions and extend the standard model of sequential second-price auctions to a dynamic game with an infinite horizon with one new buyer entering the auction every period. I first derive properties of the symmetric and stationary equilibrium, where buyers bid according to their private valuation less a pivotal continuation value, and I also show that the price path in such equilibrium is weakly decreasing. Imposing preconsistent beliefs, I give the conditions under which a stationary equilibrium exists.
  • Thumbnail Image
    Item
    Essays on Auction Design
    (2018) Yan, Haomin; Ausubel, Lawrence M; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
    This dissertation studies the design of auction markets where bidders are uncertain of their own values at the time of bidding. A bidder's value may depend on other bidders' private information, on total quantity of items allocated in the auction, or on the auctioneer's private information. Chapter 1 provides a brief introduction to auction theory and summarizes the main contribution of each following chapter. Chapter 2 of this dissertation extends the theoretical study of position auctions to an interdependent values model in which each bidder's value depends on its opponents' information as well as its own information. I characterize the equilibria of three standard position auctions under this information structure, including the Generalized Second Price (GSP) auctions, Vickrey-Clarke-Groves (VCG) auctions, and the Generalized English Auctions (GEA). I first show that both GSP and VCG auctions are neither efficient nor optimal under interdependent values. Then I propose a modification of these two auctions by allowing bidders to condition their bids on positions to implement efficiency. I show that the modified auctions proposed in this chapter are not only efficient, but also maximize the search engine's revenue. While the uncertainty of each bidder about its own value comes from the presence of common component in bidders’ ex-post values in an interdependent values model, bidders can be uncertain about their values when their values depend on the entire allocation of the auction and when their values depend on the auctioneer's private information. Chapter 3 of this dissertation studies the design of efficient auctions and optimal auctions in a license auction market where bidders care about the total quantity of items allocated in the auction. I show that the standard uniform-price auction and the ascending clock auction are inefficient when the total supply needs to be endogenously determined within the auction. Then I construct a multi-dimensional uniform-price auction and a Walrasian clock auction that can implement efficiency in a dominant strategy equilibrium under surplus-maximizing reserve prices and achieve optimal revenue under revenue-maximizing reserve prices. Chapter 4 of this dissertation analyzes an auctioneer's optimal information provision strategy in a procurement auction in which the auctioneer has private preference over bidders' non-price characteristics and bidders invest in cost-reducing investments before entering the auction. I show that providing more information about the auctioneer's valuation over bidders' non-price characteristics encourages those favored bidders to invest more and expand the distribution of values in the auction. Concealment is the optimal information provision policy when there are two suppliers.
  • Thumbnail Image
    Item
    Matching Issues: An auction with externalities and unraveling matching markets
    (2005-06-22) Ranger, Martin; Cramton, Peter; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)
    This dissertation examines two problems that may arise in matching problems. The first two chapters deal with auctions for multiple units where bidders exhibit externalities. The third chapter links risk aversion and information to unraveling in labor markets. Auctions can lead to efficient allocations in a wide class of assignment problems. In the presence of externalities, however, efficiency may no longer be guaranteed. This dissertation shows that a modification of Ausubel & Milgrom (2002)'s generalized ascending price auction can be used to allocate multiple items to bidders in this case. Despite the presence of externalities, the resulting auction possesses an efficient Nash equilibrium in pure strategies leading to a core allocation. Furthermore, under certain restrictions on bidder valuations, truthful revelation of valuations is found to a dominant strategy. The auction is augmented to include explicitly the auctioneer's preferences over final outcomes. Externalities affecting non-participants can thus be accounted for straightforwardly. In Cournot game where capacity constraints are determined in an auction prior to the market interaction, the valuations for capacity in the auction will exhibit externalities. Using the generalized ascending price auction allows the bidding firms to reach a joint profit maximizing capacity allocation below the Cournot equilibrium level. Since this comes at the expense of consumer surplus the auctioneer may have an incentive to specify its own valuation taking into account total surplus maximization. Then, the final capacity allocation is bounded by the profit maximizing and the Cournot equilibrium level. Unraveling labor markets, that is periodic labor markets where appointments are made earlier and earlier often leading to a break-down of the market, have been linked to risk-averse workers attempting to reduce the variability of the outcome. In many cases, early contracts are used to fix a wage when the relative supply and demand of workers in the market and hence the division of surplus is uncertain. This chapter represents a different approach. Both workers and firms have preferences over matchings and uncertainty is introduced through the quality of workers. Risk averse workers or risk-loving firms are found to be necessary for early contracting. Further research strategies are suggested.