Alessandro Audino, Damiano Peinetti, Marco Tolini

Computer Science and Simulation for Economics

Project work on

"Descending auction (2/2)."

 

The applet requires Java 1.4.1 or higher. It will not run on Windows 95 or Mac OS 8 or 9. Mac users must have OS X 10.2.6 or higher and use a browser that supports Java 1.4. (Safari works, IE does not. Mac OS X comes with Safari. Open Safari and set it as your default web browser under Safari/Preferences/General.) On other operating systems, you may obtain the latest Java plugin from Sun's Java site.


created with NetLogo

view/download model file: descending_auction.nlogo

WHAT IS IT?

This work tries to analyze some basic results about auction theory. In this particular case we simulate the behaviour of the bidders taking part in an descending price auction. This auction is characterized by multiple bidding rounds. The auctioneer lowers the price of one unit each round if there are no bidders having an offer price equal to the asked price.


HOW IT WORKS

We represent the bidders as business-man shaped turtles. Each one of them has his own reserve price constant over the rounds of the auction. We can choose the number of starting bidders. The number of rounds depends on the simulation.


HOW TO USE IT

First you have to choose the settings of the variables in the sliders. Then you have to push the "Setup" button in order to dispose tha agents for the auction. If you push the "make bid" button all the rounds are sequentially simulated, alternatively if you want to observe the statistics of a single round you can push the "make only one bid" button.


THINGS TO NOTICE

The bidders become red once they enter into the auction, when their reserve price is at least equal to the asked price.


EXTENDING THE MODEL

An interesting extension consists in an improvement of the communication between the bidders in order to simulate collusive behaviours.


CREDITS AND REFERENCES

We conceived this model during the attendance of the course of "Informatics and Simulation for Economics" taught by professor Pietro Terna, to whom we are grateful.
We took inspiration by the lessons of professor Bernardo Bortolotti who introduced us the topics of Auction Theory.