Seminar by
Kemal Göler
Department of Industrial Engineering
We characterize the Bayesian Nash equilibrium under two sealed-bid split-award auction formats for awarding procurement contracts in an independent private values environment with risk-neutral bidders.
These auction formats are straightforward multi-object extensions of the first-price sealed-bid auction. We find that, although the two auction mechanisms yield the same expected costs to the buyer, other aspects of the two models, including the equilibrium bidding strategies, differ in important ways. We also analyze the predictive accuracy of equilibrium strategies in the lab. Overall, the experiments suggest that risk-neutral Bayes-Nash equilibrium strategies serve as a surprisingly accurate model for human bidding behavior in split-award auctions and that strategic complexity is an unlikely explanation for deviations from the equilibrium strategy.
Short Bio:
Kemal Goler is a researcher at the Deparment of Industrial Engineering at Bilkent. Prior to Bilkent, he worked as a principal research scientist at Hewlett- Packard Laboratories, Palo Alto,California, as an assistant professor of Economics at the University of Houston, Houston, Texas, and as visiting professor at Rice University, Houston, Texas and at Cleveland State University, Cleveland, Ohio. His research interests are in applied mechanism design - game theory, econometrics, and behavioral economics - with applications in economics and OR/OM. He holds a B.A. degree from Bogazici, an M.Sc. degree from Baylor University, both in Economics, and a Ph.D. degree in Social Science from Caltech.
