Research Statements


Robert Marshall, Economics

The bulk of my research on auctions, and procurements, has concerned collusion by bidders. One side of the work has addressed the strategic behavior of colluding bidders within a given auction scheme. Another side of the work has addressed the comparative robustness of different auction schemes to collusion. A separate small vein of the work has been dedicated to the strategies a seller might use to combat collusion during an auction. There is also a small part of the work that addresses the appropriate application (from an economic perspective) of antitrust law to issues associated with bidder collusion. The techniques employed have been theoretical, numerical, and empirical.

Note. Although there are many ``on-line'' auctions, issues associated specifically with them are currently not part of my research program (could be in the future).

James Jordan, Economics

The main subject of my current research is coalition formation.  In auctions, coalitions may form for the purpose of collusion against the auctioneer.   Electronic interchange may facilitate collusion by enabling diverse individuals with common interests to more easily locate one another and communicate.  In any case, coalition formation depends on the expectations of potential members about the response of potential competing coalitions and potential defections by subcoalitions.  Theoretical modeling seems to require solution concepts that mix rationality with bounded rationality.  I have thus far worked on coalition formation in games of allocation by force, and I am currently extending this work to more general games.  I have not yet worked on auctions, but they are a natural application, especially in view of the importance of potential collusion

Leon Vaserstein, Mathematics

For 10 years (1969-1978) I worked in industry doing operations research including optimization, statistics, game theory. Several papers and four books were published. (My publication list is at
http://www.math.psu.edu/vstein/publications.html)
Even before this, I did research on locally interacting systems (games of automata, phase transitions). Vaserstein's distance is still used in this area and statistics. Two papers were published. More recently, I published a paper on damping in iterative methods and a paper on finding strict saddle points in matrix games (with C.Byrne). Last 20 years, I am teaching often linear programming and game theory at Penn State. I am a member of Operation Research faculty and had several master students and one Ph.D. student (C.Byrne) in OR. I am writing a book on linear programming and plan a textbook on game theory (including auctions). So I have a lot of experience which is relevant to auctions, and I am very interested to apply this to new research.

Gary Bolton, Management Science and Information Systems

A substantial amount of my research has to do with issues surrounding bargaining and dispute resolution.  Methods-wise, most of my work involves techniques from experimental economics.  I am interested in extending both the bargaining line of inquiry and experimental methods into the area of electronic market design.  A more recent area of inquiry concerns the influence of reputation on decisions, and I think much of this is relevant to the issue of trust in electronic markets.

Barbara Gray, Organization and Behavior

My interest in the area of auctions concerns the human and organizational consequences that occur when business to business auctions are implemented. Questions of interest to me include: How does the profile of suppliers for a firm change, what are the consequences to the organization (and to the previous suppliers) of using a bidding rather than a negotiating process to determine who a firm's suppliers will be? My preliminary research suggests some of the following consequences: increased conflict within a firm over which purchases will be handled through auctions, destruction of trust between firm and former suppliers that may have consequences for their future interaction, potential for suppliers to be squeezed out of business, problems associated with suppliers' inability to fulfill the contractual obligations of the bid (e.g. re: quality, volume, warehousing etc.).

Chris Byrne, Applied Research Lab

I am involved in research in a few areas that could tie in with the auction center:

Game Theory:  I am conducting research with Jeffrey Kurland of Anthropology into the nature of self-deception and the effects of beliefs on interactions.  This could be relevant to e-auctions because bidder behavior and possibly other aspects of auction design could have belief effects and thus behavior effects on other bidders.  The information available to bidders would be relevant to this work.

Information Brokerage: I am researching information brokerage with Ali Hurson in CSE.  We have three graduate and one undergraduate honors student involved.  The research has a couple sides to it.  We address technical issues of  software design, such as the relative merits of client-server verses agent-based systems, how agents can be used to combine data collection with data processing, what functional advantages  can be built on advanced capabilities such as intra-agent communication and responsiveness, and how to best manage special requirements posed by mobile computers including palm-top systems.  Another side to the research investigates information modeling, including semantics and dynamic, user-tailored information organization and search at varying levels of abstraction. Information brokerage could be relevant to e-auctions along the lines of designing information systems that would improve the functioning of e-auctions by purely technical criteria (which would fall within the scope of our work) and/or game theoretic criteria (to which we could design, even though the development of such criteria would be outside the immediate scope of our work).

Information transmission and local interactions:  Information transmission is highly analogous, in terms of mathematical models, to the spread of infectious diseases. Communication errors take the place of  mutation and deception takes the place of non-mutant ``pre-programmed'' changes in viruses.  Coding theory, which I am currently teaching, as well as local interaction dynamics prevalent in much recent game theory research, both relate to this topic, and tie into Dr. Kurland's and my research on deception and belief effects as well.

Operations Research:  This is a broad category to describe much applied systems analysis and design work I do at ARL and mathematical modeling for which I frequently collaborate with Leonid Vaserstein of Mathematics.  The analysis of an e-auction in terms of its effectiveness as a mechanism for achieving some desired social or economic goal could draw heavily on operations research methodologies, combining them with results and criteria from economics, ethics, sociology, and other fields.  The practical design challenges of an e-auction would also draw on operations research.
 

Abdullah Yavas, Insurance and Real Estate

The focus of my research on auctions has been on multi-object auctions. In particular, I am interested in the consequences of revenue-maximizing "bundling" of the objects to be auctioned. This is an issue with agricultural land auctions where tracks of land are auctioned in bundles rather than as individual tracks. This is also an issue with online retailers such as Amazon.com. Internet has basically eliminated the search cost for consumers to find the lowest price and turned the game into a procurement game for the online retailers. One of my recent projects attempts to show that when all the stores sell homogeneous set of products/services, then bundling of goods/services might be the only way for online retailers to avoid zero or negative profits due to cut-throat price competition. The techniques I have employed in my auction research have been theoretical and experimental.

Ian Domowitz, Finance

The initial purpose of this research agenda was to begin the study of one aspect of the integration of technology into financial market architecture: the automation of the trade execution process itself. The algorithms governing execution contribute directly to price discovery and quantity allocation, which constitute the two basic functions of any market mechanism.  Areas of research include:

1Legal and regulatory issues inherent in attempting to define a financial market within a computer
2Collection and analysis of unpublished information on the workings of algorithms determining prices and quantities in practice
3Market efficiency issues
4Investigation of the proposition that market structure, net of behavioral rules, can be a determining factor in the characterization of the stochastic process of prices
5Comparisons of automated continuous markets, automated periodic markets, and traditional open outcry auction mechanisms
6Use of information observable through electronic order books, for characterizations of order submission behavior and the structure of pricing
7Relative trading costs across electronic and traditional/intermediated auction markets
8Changes in the industrial organization and strategic conduct of markets due to automation

Methodologies include statistical analysis, numerical/simulation methods, theoretical equilibrium models, and legal case studies.  Further information is available at http://www2.smeal.psu.edu/faculty/ihd1/Domowitz.html, under "Research on Automated Trading Markets."
 

Kenneth M. Lusht, Insurance and Real Estate

I have done two pieces of research on auctions, both using data from property markets in Australia. I am currently working on a third paper using data from Singapore. My first paper compared house prices brought by English auctions to prices brought by traditional private negotiation. The second tested the "afternoon effect" on the sale of 50 branch banks in Melbourne. The current project is expected to produce evidence on both auction vs. private negotiation prices, and on price changes as an auction proceeds. I have done nothing on electronic commerce, which I suspect will be common to most of us.

C. Lee Giles, Information Science and Technology, and, Computer Science and Engineering

I'm new to Penn State and just joined this fall. Previously, I ran a small research group at NEC Research Institute in Princeton on web computing and information processing. I have two research interests that might be appropriate to the research center. For the last 4 years we have been doing research (and have published  over 30 papers including one in Science and Nature) on the content and mining of information on the web. We have also been concerned with the design and construction of novel web search architectures and tools and with the algorithms that facilitate efficient web search and data mining. Two of the search tools we built can be demo-ed and used at
http://inquirus.com
http://researchindex.com
Previously, my research was primarily in artificial intelligence and machine learning, and some of my recent research can also be viewed from that perspective - inserting computational intelligence into the
search and data and knowledge mining processes. I have a continued interest in applying AI and machine learning methodologies to processes in business and finance and information filtering and knowledge extraction. Among other things, I would be interested in research that used AI and machine learning and agents in searching for relevant web information  and the automatic extraction of that knowledge to facilitate market decisions and analysis. I also have a new interest in the computational aspects of artificial markets such as www.hsx.com.

Stephen G. Simpson, Mathematics

I am a mathematician specializing in mathematical logic and foundations of mathematics. Until recently, I have not done any research on auctions or economics. Recently I have been studying the work of Robert J. Aumann on so-called interactive epistemology, a kind of modal logic with several knowers. The results and techniques of mathematical logic (tableaux, completeness and soundness, Kripke models, decidability, etc) are highly relevant. To jump-start myself in the area of electronic auctions, I am planning to attend the workshop "Mathematics of the Internet: E-Auctions and Markets," at the Institute for Mathematics and Applications in Minneapolis, December 3-5, 2000, <http://www.ima.umn.edu/multimedia/fall/auction.html>.

Kalyan Chatterjee   [bio], Management Science and Information Systems, and,  Economics

As you know, I've published four papers in auctions, some in bargaining and one that has been cited in both literatures, since a double auction and bargaining have common elements. I am interested in markets made up of bilateral and multilateral transactions and communication.

Vijay Krishna, Economics

My recent work concerns game theoretic models of auctions.  Auction theory is concerned with the evaluation of different auction formats on two grounds: (a) the revenue accruing to the seller; and (b) the allocative efficiency.  The meaning of the former is clear.  An auction is said to be efficient if it ensures the objects sold end up in the hands of those who value them the most and can put them to the best use.  This is particularly important in cases where the seller is the government and the purpose of the auction is to transfer some publicly held assets to private hands (for instance, the sale of oil drilling rights or licenses for radio spectra).  My recent work has concerned the efficiency properties of various auction formats, comparing sealed-bid with open ascending bid auctions.   The main finding here concerns the advantages of open auctions on grounds of efficiency.  I have also written on how various auction formats compare when bidders are subject to financial or borrowing constraints.

Kala Krishna, Economics

My research in auctions has been in a number of areas, mostly with a focus on industrial organization and international trade, rather than pure theory.. On the theoretical end, I have done some work on multiple unit auctions with complete information using a menu auction (common agency) setting with Torben Tranaes. On the regulation side, I have some work on deregulating electricity markets  so that production efficiency obtains using auction like mechanisms when there is under uncertainty about demand for electricity, also with Torben Tranaes. In industrial organization. I have worked on auctioning licenses sequentially when valuations are endogenous which helps understand the evolution of market structure. In international trade I have worked on auctioning quota licenses in the presence of uncertainty with Ling Hui Tan, and on their effects when there is imperfect . I am currently working with Ling Hui Tan and Wendy Tackas on an empirical project dealing with quota license auctions in New Zealand and Australia.

I have not done any work on e commerce or online auctions. However there are issues in industrial organization and trade that seem interesting.

Tomas Sjostrom, Economics

My research concerns the design of mechanisms for social decision making. My early research analyzed theoretical problems relating to the allocation of divisible goods: what is the smallest dimension of messages that agents need to send to a "social planner" in order to implement a socially optimal decision; what is the set of implementable outcomes; what happens if agents are not completely rational but make "mistakes". I have recently been interested in more applied topics, such as the optimal design of a firm and the optimal design of a credit contract. I am currently writing a survey on mechanism design. (I have no papers specifically on auctions.)

Soundar Kumara, Industrial and Manufacturing Engineering

Auctions is not my main research area. I work in intelligent agents. I model procurement problem solving in supply chain problems. In this I use game theoretic principles and reverse English auction as a means to model the coordination between trucks and the manager of the trucks in a transportation companies which are modeled as agents. I am also working on using auctions in distributed multi project management
problems. In both these efforts I work closely with Drs. Kalyan Chatterjee and Anant Balakrishnan.
I am mainly interested in the computing aspects of auctions as applied to manufacturing related problems.
I am funded by NSF on two projects which have some components of both Supply Chain and Project
management.

Hemant K. Bhargava, Management Science and Information Systems

I am interested in a couple of topics related to electronic auction/marketplaces.
 1) Analysis of Price discrimination and product differentiation by firms operating electronic markets/auctions and offering intermediation services -- particularly focusing on aggregation benefits and indirect network effects.
2) Formal languages and formal modeling of auction systems -- design of formal languages for representation of trading rules and procedures, and for communication between autonomous entities participating in electronic auctions.

Herman Bierens, Economics

You can count me in on this project, for general econometrics expertise.