Design and Strategies of Dynamic Auctions for Procurement Manager

This auction design is in ascending form.  It is meant for a number of homogeneous items.  Very good results are seen in the dynamic auction.  The dynamic system is used for selling electricity.  It is sold by means of auction.  The seller must know the frequency of the auction.  The timing of the contract should be known.  An auction model should be used.  This model must be dynamic.  We must know the relation between the evaluation of the bidder and the right frequency.  The rate of auction must rise and there is decline in persistency.  We find a collusion among the bidders.  There is a reversal of the comparative statics. 

Procedure of Auction

In a market, the goods as well as services are sold through auctions one after another.  So the person organizing the auction should carry out a scheme  that is dynamic.  The single auction is preferred.  The bidders have their competition once.  No future association is observed.  A noncompetitive outcome in equilibrium is seen.  Now the question arises as to how the bidder should examine the frequency of the auction.

Efficiency of Bidder

If we consider the efficiency, we raise the time the product is held by the bidder.  There are large packages in the contract.  As a result, there is more profit.  This is seen in the deviator and we observe an aggressive bidding.

Intuition of Bidding

This is an intuitive process.  We would expect that this is a world without collusion.  We see high frequency at lower persistence level.  The rates of the bidders change quickly.  The efficiency gain from the auction rises.  For example, the California Power Exchange had held auctions frequently.  They were based on short term contracts.  This was done in response to the willingness of the buyers.  We observe a reversal in the comparative static when the buyers collude.  The number of evaluations will be less when the buyers show volatile valuations.

We observe a model that is continuous in time and have infinite horizon.  We have N number of bidders who are fighting for the flow of products.  This type of auction is first-price.  The auctioneer takes a decision on the number of times the auction will be held.  This strategy is repeated many times by the bidder.   There are different rules of selection of equilibrium. 

The benchmark case is examined.  The static Nash equilibrium is dealt with.  We can view it as a non-collusive behavior.  The transaction of the auctioneer increases as the profit of the auction increases.  The frequency is chosen as infinite by the user.