Motores de la clase de protección no inflamable Ex n

Auction markets represent potentially rich environments within which to analyse

behaviour. Classical auction theory rests on an assumption of Revenue Equivalence whereby rational sellers should expect the same average profits from all standard auctions, implying that buyers should also be indifferent between auctions of equivalent items (Vickery, 1962). Efficient auctions then exist when final sale prices converge with objective values as the number of bidders increases. This is the case even if individuals only have partial information with regard to objective values as the actions of rational bidders are assumed to aggregate all available relevant information in the final price (Milgrom, 1979). Rational bidders are therefore assumed to act in order to maximise their own consumer surplus, defined as the difference between their private market value (v) for an item and the price (p) which they have to pay to acquire it.

Early theory often described auction environments comprising a fixed number of risk- neutral bidders each acting on the basis of independent information. Whereas Myerson (1981) showed that optimal auctions which maximise the seller’s revenues could occur even in the absence of symmetry of information between buyers and sellers, Maskin and Riley (1984) found that the specific format of an auction could affect bidder behaviour, in some cases determining outcomes. As a result, first-price sealed bid auctions were found to be generally more profitable to a seller than standard auctions. Milgrom and Weber (1982) replaced the

assumption of independent information with the concept of “affiliated” information, which exists when one bidder has more optimistic information about an item’s value. They suggest that such situations increase the average profitability of standard auctions as affiliated

information tends to increase the optimism, and hence willingness to pay, of other bidders.

Prior to the Internet age, auctions tended to be considered as isolated, standalone events. The advent of online auctions, through sites such as eBay, has dramatically changed this landscape to the extent that multiple, close-to-identical items are regularly offered. Thus, online marketplaces are characterised by substantial competition between sellers, buyers and close-to-identical items. In theory, such high levels of competition between buyers and sellers and low cost of access to relevant information should lead to efficient outcomes as implied by revenue equivalence. Selling prices for identical items should therefore converge to “fair value” since rational bidders would compete for items currently priced below that equilibrium level.

However, as opposed to being indifferent between auctions offering apparently identical items, numerous factors have been found to affect bidder preferences and resulting behaviour. Thus seller reputation has been identified as a significant factor affecting potential buyer interest (Bajari & Hortacsu, 2004). Similarly, auction duration (Haruvy, Popkowski Leszcyc, 2008), the presence of reserve prices (Katkar & Reiley, 2006), lot sizes and bid increments (Rothkopf & Harstad, 1994; Bapna, Chang & Gupta, 2009) have all been found to affect the relative attractiveness of particular auctions with bidders typically favouring more liquid auctions with smaller fixed bidding increments. The presence of reserve prices has been found to act as a relative deterrent as highest bidders cannot be sure of securing an item in the event that the (undeclared) reserve price is not met.

The particular structure of an auction can also affect its relative appeal. Thus, the

presence of a “buy-it-now” (BIN) option, whereby buyers can purchase the item at a declared price, ending the particular auction, has been found to be significant. BIN allows bidders to adopt an exit strategy based upon the posted BIN price rather than pursue the potentially riskier strategy of bidding to the conclusion of the competitive auction. Such auctions have been found to improve seller outcomes when sellers already have high reputation scores (Anderson, Friedman, Milam & Singh, 2008; Hardesty & Suter 2013; Standifird, Roelofs, & Durham, 2005; Wang, Montgomery & Srinivasan, 2008;.Yoo, Ho, & Tam, 2006). BIN options therefore appear to create differentiation between close-to-identical products which then improves outcomes for certain categories of seller (Ackerberg, Hirano & Shahriar, 2006). Auctions with this feature have also been analysed in relation to consumer traits with some evidence of impulse buying and risk aversion (Angst, Agarwal & Kuruzovich, 2008). Other behavioural biases, such as herding, have also been identified (Ariely & Simonson, 2003; Bockstedt, Goh & Ng 2013); in aggregate, bidders appear to be attracted to auctions which are more active in terms of bidding activity, even though this would indicate higher potential competition (Dholakia, Basuroy & Soltysinski, 2002; Simonsohn, & Ariely, 2008). Similar evidence has been found for quasi-endowment and opponent effects leading to over-bidding (Heyman, Orhun & Ariely, 2004).

In terms of the efficiency of outcomes, Sun (2005) found evidence of substantial price dispersion across 3,164 sequential eBay auctions of close-to-identical items, violating the assumption of revenue equivalence. The degree of price dispersion is somewhat surprising given the relatively low cost of information acquisition within online auctions. Bidders therefore appear to place substantial weight on non-item related characteristics which differentiate between auctions and adopt very different strategies as evidenced by level of

search effort. In the case of concurrent auctions, evidence of cross-bidding and active switching between auctions in order to seek the lowest price has been found (Anwar, McMillan & Zheng, 2006; Rand & Jank, 2013; Liang, 2014), although not all participants appear to switch between competing auctions, the resulting inertia contributing substantially to differentials in final price outcomes. A further feature, peculiar to fixed-duration online auctions, is the prevalence of very late bidding, a process known as ‘sniping’ (Barbaro & Bracht, 2004; Borle, Boatwright & Kadane, 2006; Ockenfels & Roth, 2006). Sniping

represents an attempt to enter a sequentially higher bid sufficiently close to the end time of the auction to prevent a completive response from other bidders. The strategy is not, however, entirely risk-free in terms of item capture as, should a competitor manage to place an even later bid, the original sniper may themselves run out of time to counterbid.

While studies have examined bidding outcomes in contemporaneous online auctions, the behaviour of auction participants in terms of tracking overlapping auctions has been less well explored. Haruvy and Popkowski Leszcyc (2010) did investigate switching between

contemporaneous auctions of identical goods from a perspective of search cost using data from eBay. Designed to examine the factors which contributed to price dispersion, the cost of searching was found to be a significant factor in explaining inertia amongst bidders.

Lowering search costs, by offering financial incentives (the removal of shipping or postage costs), was then found to reduce inertia leading to greater switching activity and lowering price dispersion as a result. The study used actual bids in the different auctions to represent the degree of switching; it therefore did not capture data relating to switches between auctions which did not result in actual bids.

An agent-based approach examining switching and bidding behaviour was employed by Rand and Jank (2013). Actual bidding data was again taken from eBay relating to auctions in which equivalent, brand new Canon SD1000 cameras were being offered by different sellers. In each case, the cameras were offered without accessories, making the items close-to-

identical. The data covered 1155 auctions producing 19,007 bidding records. A total of 5849 bidders participated in the auctions with 1554 bidding in more than one auction. Based upon the empirical data, the authors constructed an agent-based model with switching and bidding rules in order to reproduce the price evolutions seen in the empirical data. The model

assumed that bidders behaved rationally in terms of item capture, and therefore sought to achieve the lowest possible winning bid across available auctions. Since there were multiple overlapping auctions at any point in time, certain preferences were assumed based upon bid increment and relative ending times of auctions (lower bid increments and earlier ending times being preferred). It was found that greater competition and price convergence could be achieved across competing auctions when active switching was encouraged through

identification of the lowest priced auctions. By identifying current low-priced auctions with near ending times, new bidders were attracted to those auctions while existing potential bidders remained on those auction platforms increasing competition and raising average closing bids. The authors therefore concluded that lack of information is a prime driver of observed price disparity across multiple simultaneous or overlapping auctions of close-to- identical items. Even though physical search costs in online platforms are low, there is a tangible time cost involved which a number of bidders appear reluctant to incur resulting in inertia. Similar to the findings of Haruvy and Popkowski Leszcy op cit, when the search costs are reduced, more active switching can result leading to greater competition and cross- auction price convergence.

While empirical studies of switching between simultaneous or overlapping auctions make extensive use of the volumous data which is available from online commerce sites such as eBay, switching activity is largely inferred from actual bid patterns. These approaches therefore fail to include data for auction switching which does not result in bidding activity. The study below makes an attempt to fill this gap by testing switching activity independent of actual bidding using a simulated platform with two simultaneous, short, fixed-duration