Essays on Auction Theory and Application
| dc.contributor.advisor | Vincent, Daniel | en_US |
| dc.contributor.author | Tu, Shunjie | en_US |
| dc.contributor.department | Economics | en_US |
| dc.contributor.publisher | Digital Repository at the University of Maryland | en_US |
| dc.contributor.publisher | University of Maryland (College Park, Md.) | en_US |
| dc.date.accessioned | 2019-09-27T05:32:29Z | |
| dc.date.available | 2019-09-27T05:32:29Z | |
| dc.date.issued | 2019 | en_US |
| dc.description.abstract | 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. | en_US |
| dc.identifier | https://doi.org/10.13016/ceus-mq7j | |
| dc.identifier.uri | http://hdl.handle.net/1903/24985 | |
| dc.language.iso | en | en_US |
| dc.subject.pqcontrolled | Economics | en_US |
| dc.subject.pquncontrolled | auctions | en_US |
| dc.subject.pquncontrolled | incomplete information | en_US |
| dc.title | Essays on Auction Theory and Application | en_US |
| dc.type | Dissertation | en_US |
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