Modelling and computational simulation of optimal auction design and bidding strategies
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | Modelling and computational simulation of optimal auction design and bidding strategies | |
| Creator | Mavungu, Masiala Hurwitz, Evan Marwala, Tshilidzi | |
| Description | Orientation: This article is related to Finances and Optimisation. The auctioneer designs every auction mechanism such that utility is maximised and cost is minimised.Research purpose: This article proposes an optimal auction mechanism through which auctioneers can assign fairly and efficiently assets to the highest bidders and maximise utility and/or minimise cost.Motivation for the study: One of the tasks of my PhD was about spectrum auction from which I got a vision to design mathematical models and related computational simulations for any asset underlying an auction.Research approach/design and method: Firstly, a study was conducted to model the way auctioneers could analyse and estimate bidders’ (buyers’) valuations, and then, accordingly, set the prices of the underlying assets or services. An open ascending-bid auction mechanism was also considered. Finally, a first-price sealed-bid auction mechanism for utility maximisation and cost minimisation is investigated.Main findings: The substantive contribution of this article is in the set of mathematical models and computational simulations designed and proposed for the bidders’ valuations and the considered open ascending-bid auction. For the investigated first-price sealed-bid auction mathematical models are developed in terms of a combinatorial optimisation problem. The formula computing the expected utility for the auctioneer was designed.Practical/managerial implications: The research provides rigorous ways for optimal auction design to auctioneers and any financial operators or managers.Contribution/value-add: The contributions are in the set of mathematical models and computational simulations. This article models the optimal auction design strategy mechanism as a combinatorial optimisation problem. | |
| Publisher | AOSIS | |
| Date | 2019-10-30 | |
| Identifier | 10.4102/jef.v12i1.415 | |
| Source | Journal of Economic and Financial Sciences; Vol 12, No 1 (2019); 6 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/415/785
https://jefjournal.org.za/index.php/jef/article/view/415/784
https://jefjournal.org.za/index.php/jef/article/view/415/786
https://jefjournal.org.za/index.php/jef/article/view/415/783
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