Ranked Items Auctions and Online Advertisement

We study auctions for a set of commonly‐ranked items where each buyer has unit demand. This setting has promising applications in areas such as keyword auctions in the search engine advertising industry, the sale of quality‐ranked raw materials, etc. An auction mechanism suitable for this setting is the simultaneous pooled auction (SPA), where each bidder simultaneously submits a single bid and is allocated an object based on the rank of his bid among all the bids. We study how to improve the seller's expected revenue by enforcing a reserve price in an SPA. We find that the use of an appropriate reserve price may significantly increase the seller's revenue, especially when the number of items for sale is relatively large compared to the number of participating bidders. One inherent problem in the SPA is that some bidders may incur ex post losses; that is, they pay more than what they value the received objects. We propose a tailored VCG mechanism that generates the same expected revenue as the SPA does, while bidders do not incur any ex post loss. We also discuss the potential applications of this research to keyword auctions.     

Customer Behavior Modeling in Revenue Management and Auctions: A Review and New Research Opportunities

Customer behavior modeling has been gaining increasing attention in the operations management community. In this paper we review current models of customer behavior in the revenue management and auction literatures and suggest several future research directions.     

Risk and Quantification: A Linguistic Study

In risk analysis and research, the concept of risk is often understood quantitatively. For example, risk is commonly defined as the probability of an unwanted event or as its probability multiplied by its consequences. This article addresses (1) to what extent and (2) how the noun risk is actually used quantitatively. Uses of the noun risk are analyzed in four linguistic corpora, both Swedish and English (mostly American English). In total, over 16,000 uses of the noun risk are studied in 14 random (n = 500) or complete samples (where n ranges from 173 to 5,144) of, for example, news and magazine articles, fiction, and websites of government agencies. In contrast to the widespread definition of risk as a quantity, a main finding is that the noun risk is mostly used nonquantitatively. Furthermore, when used quantitatively, the quantification is seldom numerical, instead relying on less precise expressions of quantification, such as high risk and increased risk. The relatively low frequency of quantification in a wide range of language material suggests a quantification bias in many areas of risk theory, that is, overestimation of the importance of quantification in defining the concept of risk. The findings are also discussed in relation to fuzzy‐trace theory. Findings of this study confirm, as suggested by fuzzy‐trace theory, that vague representations are prominent in quantification of risk. The application of the terminology of fuzzy‐trace theory for explaining the patterns of language use are discussed.     

A Reply to Gambino's "An Epidemiologic Note on Verification Bias: Implications for Estimation of Rates"

While two-stage designs in problem gambling research are expensive and relatively difficult to execute, they have the potential to yield more accurate prevalence estimates as well as valuable additional information about gambling and problem gambling in the community. However, gains in precision are heavily dependent on the accuracy of the screening methods used and the sample sizes involved. Sound practice requires reliable information about the variances and confidence levels associated with different screens. In the spirit of contributing to the ongoing dialog about ways to improve the measurement of problem gambling, we examine several reasons to question whether the revised estimates offered by Gambino are in fact an improvement.     

The Malleability of Environmentalism

In this article, we predict and find that self-perceptions of environmentalism are changed by subtle manipulations of context and, in turn, affect environmental behavior. In Study 1, we found that people exhibit greater positive assessments of their environmental behaviors (1) in the context of denying harm to the environment than in the context of claiming to help the environment, and (2) in situations where behaviors are evaluated subjectively than in situations where behaviors are evaluated more objectively. In Study 2, we explored the relationship between self-perceptions of environmentalism and environmental behaviors. Our data suggest that environmentally friendly behaviors may be promoted by leading people to perceive themselves as good environmentalists.     

Commerce on the Stock and Commodity Exchanges [Die Börsenverkehr]

Theory and Society -