Dynamic Decision Making in Sequential Business-to-Business Auctions: A Structural Econometric Approach

• 成果类型: Article
• 署名作者: Lu, Yixin; Gupta, Alok; Keller, Wolfgang; van Heck, Eric
• 署名单位: George Washington University; University of Minnesota System; University of Minnesota Twin Cities; University of Cologne; Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2018.3118
• 发表日期: 2019
• 页码: 3853-3876
• 关键词: Auction design; dynamic discrete games; Sequential auction; structural modeling

摘要

We develop a dynamic structural model of competitive bidding in multiunit sequential business-to-business auctions. Our model accounts for two notable characteristics of these auctions: (i) bidders have multiple purchase opportunities for the same product, and (ii) winning bidders in each round can acquire multiple units of the same product. We apply the model to bidding data from the world's largest flower wholesale market at which trades are facilitated through fast-paced, sequential, Dutch auctions. Using a two-step estimation approach, we are able to recover the structural parameters effectively and efficiently. We then conduct policy counterfactuals to evaluate the performance of alternative design choices. The results suggest that the current auction practice still has ample room for improvement. In light of this, we propose an optimization framework that can facilitate auctioneers' decisions in making the trade-off between revenue maximization and operational efficiency.