In this paper we suggest a model of sequential auctions with endogenous participation where each bidder conjectures about the number of participants at each round. Then, after learning his value, each bidder decides whether or not to participate in the auction. In the calculation of his expected value, each bidder uses his conjectures about the number of participants for each possible subgroup. In equilibrium, the conjectured probability is compatible with the probability of staying in the auction. In our (...) model, players face participation costs, bidders may buy as many objects as they wish and they are allowed to drop out at any round. Bidders can drop out at any time, but they cannot come back to the auction. In particular we can determine the number of participants and expected prices in equilibrium. We show that for any bidding strategy, there exists such a probability of staying in the auction. For the case of stochastically independent objects, we show that in equilibrium every bidder who decides to continue submits a bid that is equal to his value at each round. When objects are stochastically identical, we are able to show that expected prices are decreasing. (shrink)

The article presents an Internet experiment where subjects sequentially bid for basic gifts and binary-lotteries on these gifts in incentive compatible Vickrey auctions. Subjects exhibit uniformly pessimistic prize-weighting in spite of precautions to reduce suspicion and prohibit collusion. The bids for lotteries are close to the minimal payable value, even when the probability of obtaining a better prize is larger than 50%. Prize-weighting becomes even more conservative as the distance in value of payable prizes increases. The twofold aversive affect (...) appears for three distinct groups of students; we demonstrate, however, that the same subjects overweight small win-probabilities in standard binary-choice. (shrink)

The economics of search is a prominent component of economic theory, and it has a richness and elegance that underpins a host of practical applications. In this book Brian and John McCall present a comprehensive overview of the economic theory of search, from the classical model of job search formulated 40 years ago to the recent developments in equilibrium models of search. The book gives decision-theoretic foundations to seemingly slippery issues in labour market theory, estimation theory and economic dynamics in (...) general, and surveys the entire field of the economics of search, including its history, theory, and econometric applications. Theoretical models of the economics of search are covered as well as estimation methods used in search theory and topics covered include job search, turnover, unemployment, liquidity, house selling, real options and auctions. The mathematical methods used in search theory such as dynamic programming are reviewed as well as structural estimation methods and econometric methods for duration models. The authors also explore the classic sequential search model and its extensions in addition to recent advances in equilibrium search theory. (shrink)

Games and Decision Making, Second Edition, is a unique blend of decision theory and game theory. From classical optimization to modern game theory, authors Charalambos D. Aliprantis and Subir K. Chakrabarti show the importance of mathematical knowledge in understanding and analyzing issues in decision making. Through an imaginative selection of topics, Aliprantis and Chakrabarti treat decision and game theory as part of one body of knowledge. They move from problems involving the individual decision-maker to progressively more complex problems such as (...) sequential rationality, auctions, and bargaining. By building each chapter on material presented earlier, the authors offer a self-contained and comprehensive treatment of these topics. Successfully class-tested in an advanced undergraduate course at the Krannert School of Management and in a graduate course in economics at Indiana University, Games and Decision Making, Second Edition, is an essential text for advanced undergraduates and graduate students of decision theory and game theory. The book is accessible to students who have a good basic understanding of elementary calculus and probability theory. (shrink)

Internet fraud is an issue that increasingly concerns regulators, consumers, firms, and business ethics researchers. In this article, we examine one common form of internet fraud, the practice of shill bidding (when a seller in an auction enters a bid on his or her own item). The significant incidence of shill bidding on eBay (in spite of the fact that it is illegal just as it is in live auctions) exemplifies the current ineffectiveness of regulatory means as well as (...) the lack of effective societal mechanisms to prevent online fraud. Further, the proliferation of shill bidding along with other types of internet fraud may have broader implications. If unethical behavior such as shill bidding becomes too widespread on the internet, regulators and other societal forces may deem it necessary to institute controls that will impact the entire online marketplace as well as the future development and regulation of business activities on the internet. Our results indicate that shill bidding is perpetrated on eBay significantly more often than 0.1% rate of fraud estimated by the firm. This suggests that regulators, users, and others stakeholders may become concerned enough to act. The impact of those responses on the internet of the future may affect a broad array of users beyond the unethical sellers on eBay. (shrink)

This article explores the possibilities offered by Collins’ model of interaction rituals to an understanding of the emotional dynamics of art auctions. It argues that whilst it explains how the art object becomes the focus of attention, and thus the repository of solidarity and emotional energy, it also obliterates some of the institutional aspects of the auction market that can influence such outcomes. It discusses the need to include an examination of the specific practices of auction houses operating in (...) an international market in their capacity to target specific audiences for their sales. (shrink)

We study a dynamic auction mechanism in the context of private provision of a discrete public good under incomplete information. The bidders have private valuations, and the cost of the public good is common knowledge. No bidder is willing to provide the good on her own. We show that a natural application of open ascending auctions in such environments fails dramatically: The probability of provision is zero in any equilibrium. The mechanism effectively auctions off the ‘right’ to be (...) the last one to contribute, but intuition suggests that neither player wishes to be the last one to contribute. Since the player who contributes first has the advantage of being able to free ride on the contributions of the other players, no player wants to ‘win’ the auction. (shrink)

It will be shown that the Peres–Mermin square admits value-definite noncontextual hidden-variable models if the observables associated with the operators can be measured only sequentially but not simultaneously. Namely, sequential measurements allow for noncontextual models in which hidden states update between consecutive measurements. Two recent experiments realizing the Peres–Mermin square by sequential measurements will also be analyzed along with other hidden-variable models accounting for these experiments.

Do hard budget constraints work in favour or against truth telling in double auctions? McAfee constructed a simple double auction mechanism, which is strategyproof and minimally inefficient, but may resort to dual prices, where the difference between prices is channelled as a surplus to the market maker, preventing MDA from achieving a balanced budget. We construct a variant of MDA in which no-loss constraints play a major positive role. Our variant of MDA is also strategyproof, as efficient as MDA (...) but improves on it by achieving a balanced budget via always having a uniform price. (shrink)

We show that linear logic can serve as an expressive framework in which to model a rich variety of combinatorial auction mechanisms. Due to its resource-sensitive nature, linear logic can easily represent bids in combinatorial auctions in which goods may be sold in multiple units, and we show how it naturally generalises several bidding languages familiar from the literature. Moreover, the winner determination problem, i.e., the problem of computing an allocation of goods to bidders producing a certain amount of (...) revenue for the auctioneer, can be modelled as the problem of finding a proof for a particular linear logic sequent. (shrink)

The “fair benefits” approach to international research is designed to produce results that all can agree are fair without taking a stand on divisive questions of justice. But its appealing veneer of collaboration masks ambiguities at both a conceptual and an operational level. An attempt to put it into practice would look a lot like an auction, leaving little reason to think the outcomes will satisfy even minimal conditions of fairness.

According to T. M. Scanlon’s anti-aggregation principle, it is wrong to save a larger number of people from minor harms rather than a smaller number from much more serious harms. This principle is a central part of many influential and anti-utilitarian ethical theories. According to the sequential-dominance principle, one does something wrong if one knowingly performs a sequence of acts whose outcome would be worse for everyone than the outcome of an alternative sequence of acts. The intuitive appeal of (...) the sequential-dominance principle should be obvious; everyone is knowingly made worse off if it is violated. In this paper, I present a number of cases where one is forced to violate either the anti-aggregation principle or the sequential-dominance principle. I show that these principles conflict regardless of whether one accepts a counterfactual or a temporal, worsening view of harm. Moreover, I show that this result holds regardless of how much worse a harm has to be in order to count as a much more serious harm. (shrink)

Each day, a countless number of items is sold through online auction sites such as eBay and Ricardo. Though abuse is being reported more and more, transactions seem to be relatively hassle free. A possible explanation for this phenomenon is that the sites’ reputation mechanisms prevent opportunistic behavior. To analyze this issue, we first summarize and extend the mechanisms that affect the probability of sale of an item and its price. We then try to replicate the results as found in (...) four recent papers on online auctions. Our analyses reveal that (1) it makes sense to differentiate between ‘power sellers’ and the less regular users, (2) there are variables that have an effect on sales that are often not controlled for, (3) one should carefully consider how reputation is operationalized, ( 4) neglecting heteroscedastidty in the data can have serious consequences, and (5) there is some support indicating that effects differ across auction sites. (shrink)

Prediction‐based processes appear to play an important role in language. Few studies, however, have sought to test the relationship within individuals between prediction learning and natural language processing. This paper builds upon existing statistical learning work using a novel paradigm for studying the on‐line learning of predictive dependencies. Within this paradigm, a new “prediction task” is introduced that provides a sensitive index of individual differences for developing probabilistic sequential expectations. Across three interrelated experiments, the prediction task and results thereof (...) are used to bridge knowledge of the empirical relation between statistical learning and language within the context of nonadjacency processing. We first chart the trajectory for learning nonadjacencies, documenting individual differences in prediction learning. Subsequent simple recurrent network simulations then closely capture human performance patterns in the new paradigm. Finally, individual differences in prediction performances are shown to strongly correlate with participants’ sentence processing of complex, long‐distance dependencies in natural language. (shrink)

It is widely assumed that language in some form or other originated by piggybacking on pre-existing learning mechanism not dedicated to language. Using evolutionary connectionist simulations, we explore the implications of such assumptions by determining the effect of constraints derived from an earlier evolved mechanism for sequential learning on the interaction between biological and linguistic adaptation across generations of language learners. Artificial neural networks were initially allowed to evolve “biologically” to improve their sequential learning abilities, after which language (...) was introduced into the population. We compared the relative contribution of biological and linguistic adaptation by allowing both networks and language to change over time. The simulation results support two main conclusions: First, over generations, a consistent head-ordering emerged due to linguistic adaptation. This is consistent with previous studies suggesting that some apparently arbitrary aspects of linguistic structure may arise from cognitive constraints on sequential learning. Second, when networks were selected to maintain a good level of performance on the sequential learning task, language learnability is significantly improved by linguistic adaptation but not by biological adaptation. Indeed, the pressure toward maintaining a high level of sequential learning performance prevented biological assimilation of linguistic-specific knowledge from occurring. (shrink)

Causal Decision Theory reckons the choice-worthiness of an option to be completely independent of its evidential bearing on its non-effects. But after one has made a choice this bearing is relevant to future decisions. Therefore it is possible to construct problems of sequential choice in which Causal Decision Theory makes a guaranteed loss. So Causal Decision Theory is wrong. The source of the problem is the idea that agents have a special perspective on their own contemplated actions, from which (...) evidential connections that observers can see are either irrelevant or invisible. (shrink)

Independence is the condition that, if X is preferred to Y, then a lottery between X and Z is preferred to a lottery between Y and Z given the same probability of Z. Is it rationally required that one’s preferences conform to Independence? The main objection to this requirement is that it would rule out the alleged rationality of Allais and Ellsberg Preferences. In this paper, I put forward a sequential dominance argument with fairly weak assumptions for a variant (...) of Independence (called Independence for Constant Prospects), which shows that Allais and Ellsberg Preferences are irrational. Hence this influential objection (that is, the alleged rationality of Allais and Ellsberg Preferences) can be rebutted. I also put forward a number of sequential dominance arguments that various versions of Independence are requirements of rationality. One of these arguments is based on very minimal assumptions, but the arguments for the versions of Independence which are strong enough to serve in the standard axiomatization of Expected Utility Theory need notably stronger assumptions. (shrink)

It is widely assumed that language in some form or other originated by piggybacking on pre-existing learning mechanism not dedicated to language. Using evolutionary connectionist simulations, we explore the implications of such assumptions by determining the effect of constraints derived from an earlier evolved mechanism for sequential learning on the interaction between biological and linguistic adaptation across generations of language learners. Artificial neural networks were initially allowed to evolve “biologically” to improve their sequential learning abilities, after which language (...) was introduced into the population. We compared the relative contribution of biological and linguistic adaptation by allowing both networks and language to change over time. The simulation results support two main conclusions: First, over generations, a consistent head-ordering emerged due to linguistic adaptation. This is consistent with previous studies suggesting that some apparently arbitrary aspects of linguistic structure may arise from cognitive constraints on sequential learning. Second, when networks were selected to maintain a good level of performance on the sequential learning task, language learnability is significantly improved by linguistic adaptation but not by biological adaptation. Indeed, the pressure toward maintaining a high level of sequential learning performance prevented biological assimilation of linguistic-specific knowledge from occurring. (shrink)

We respond to recent comments on our proposal to improve justice in ventilator triage, in which we used as an example New Jersey’s publicly available and legally binding Directive Number 2020-03. We agree with Bernard Lo and Doug White that equity implications of triage frameworks should be continually reassessed, which is why we offered six concrete options for improvement, and called for monitoring the consequences of adopted triage models. We disagree with their assessment that we mis-characterised their Model Guidance, as (...) included in the NJ Directive, in ways that undermine our conclusions. They suggest we erroneously described their model as a two-criterion allocation framework; that recognising other operant criterion reveals it ‘likely mitigate[s] rather than exacerbate[s] racial disparities during triage’, and allege that concerns about inequitable outcomes are ‘without evidence’. We highlight two major studies robustly demonstrating why concerns about disparate outcomes are justified. We also show that White and Lo seek to retrospectively—and counterfactually—correct the version of the Model Guideline included in the NJ Directive. However, as our facsimile reproductions show, neither the alleged four-criteria form, nor other key changes, such as dropping the Sequential Organ Failure Assessment score, are found in the Directive. These points matter because our conclusions hence stand, because the public version of the Model Guidance had not been updated to reduce the risk of inequitable outcomes until June 2021 and NJ’s Directive still does not reflect these revisions, and, hence, represents a less equitable version, as acknowledged by its authors. We comment on broader policy implications and call for ways of ensuring accurate, transparent and timely updates for users of high-stakes guidelines. (shrink)

We study a first-price auction preceded by a negotiation stage with complete information, during which bidders may form a bidding ring. We prove that in the absence of externalities, the grand cartel forms in equilibrium, allowing ring members to gain the auctioned object for a minimal price. However, identity-dependent externalities may lead to the formation of small rings, as often observed in practice. Potential ring members may condition their participation on high transfer payments as a compensation for their expected externalities (...) if the ring forms. The cartel may therefore profitably exclude these bidders, although risking tougher competition in the auction. We also analyze ring efficiency in the presence of externalities, showing that a ring may prefer sending an inefficient member to the auction, if the efficient member exerts threatening externalities on bidders outside the ring, which in turn leads to a higher winning price. (shrink)

In this paper, we study the auction to allocate an indivisible good when each potential buyer has a private and independent valuation for the item and suffers a negative externality if a competitor acquires it. In that case, the outside option of each buyer is mechanism-dependent, which implies that participation is endogenous. As several works in the literature have shown, the optimal auction entails strong threats to induce full entry and maximal expected revenue. This results from the full commitment assumption, (...) which ensures that threats are credible. We show that absent credible threats, the entry process does not lead to full participation: the equilibrium entails screening of agents in the entry stage and a trade-off between reserve prices and entry fees. Besides, we discuss the conditions under which the impossibility to use threats does not prevent the seller from ensuring a minimal screening and reaching a high expected revenue. (shrink)

In the first author's thesis [10], a sequential language, LRT, for real number computation is investigated. That thesis includes a proof that all polynomials are programmable, but that work comes short of giving a complete characterization of the expressive power of the language even for first-order functions. The technical problem is that LRT is non-deterministic. So a natural characterization of its expressive power should be in terms of relations rather than in terms of functions. In [2], Brattka examines a (...) formalization of recursive relations in the style of Kleene's recursive functions on the natural numbers. This paper is an expanded version of [13] which establishes the expressive power of LRTp, a variant of LRT, in terms of Brattka's recursive relations. Because Brattka already did the work of establishing the precise connection between his recursive relations and Type 2 Theory of Effectivity, we thus obtain a complete characterization of first-order definability in LRTp. (shrink)

Neural network models of memory are notorious for catastrophic interference: Old items are forgotten as new items are memorized (French, 1999; McCloskey & Cohen, 1989). While working memory (WM) in human adults shows severe capacity limitations, these capacity limitations do not reflect neural network style catastrophic interference. However, our ability to quickly apprehend the numerosity of small sets of objects (i.e., subitizing) does show catastrophic capacity limitations, and this subitizing capacity and WM might reflect a common capacity. Accordingly, computational investigations (...) (Knops, Piazza, Sengupta, Eger & Melcher, 2014; Sengupta, Surampudi & Melcher, 2014) suggest that mutual inhibition among neurons can explain both kinds of capacity limitations as well as why our ability to estimate the numerosity of larger sets is limited according to a Weber ratio signature. Based on simulations with a saliency map‐like network and mathematical proofs, we provide three results. First, mutual inhibition among neurons leads to catastrophic interference when items are presented simultaneously. The network can remember a limited number of items, but when more items are presented, the network forgets all of them. Second, if memory items are presented sequentially rather than simultaneously, the network remembers the most recent items rather than forgetting all of them. Hence, the tendency in WM tasks to sequentially attend even to simultaneously presented items might not only reflect attentional limitations, but also an adaptive strategy to avoid catastrophic interference. Third, the mean activation level in the network can be used to estimate the number of items in small sets, but it does not accurately reflect the number of items in larger sets. Rather, we suggest that the Weber ratio signature of large number discrimination emerges naturally from the interaction between the limited precision of a numeric estimation system and a multiplicative gain control mechanism. (shrink)

The effect of recent experience on current behavior has been studied extensively in simple laboratory tasks. We explore the nature of sequential effects in the more naturalistic setting of automobile driving. Driving is a safety-critical task in which delayed response times may have severe consequences. Using a realistic driving simulator, we find significant sequential effects in pedal-press response times that depend on the history of recent stimuli and responses. Response times are slowed up to 100 ms in particular (...) cases, a delay that has dangerous practical consequences. Further, we observe a significant number of history-related pedal misapplications, which have recently been noted as a cause for concern in the automotive safety community. By anticipating these consequences of sequential context, driver assistance systems could mitigate the effects of performance degradations and thus critically improve driver safety. (shrink)

Ronald Dworkin’s argument for resource egalitarianism has as its centerpiece a thought experiment involving a group of shipwreck survivors washed ashore on an uninhabited island, who decide to divide up all of the resources on the island equally using a competitive auction. Unfortunately, Dworkin misunderstands how the auction mechanism works, and so misinterprets its significance for egalitarian political philosophy. First, he makes it seem as though there is a conceptual connection between the ‘envy-freeness’ standard and the auction, when in fact (...) there is none. Second, he fails to appreciate how idealized the conditions are that must be satisfied in order for his results to obtain. This leads him to draw practical conclusions from the thought experiment that do not follow, such as his claim that the principle of equality generates a presumption in favor of the market as a mechanism for the distribution of resources. The result is that Dworkin saddles resource egalitarianism with a set of commitments that are, in fact, inessential to that view. (shrink)

With reference to Mead, Peirce, speech act theory, conversation analysis, and Luhmann's phenomenological grounded version of systems theory, the paper tries to reconstruct actions as products of communication. A triadic sequence is identified as the elementary unit for the intersubjective constitution of an act. This unit combines three achievements: (a) the constitution of meaning by sequential attribution, (b) the intersubjective coordination of attributed meanings, and (c) the reproduction of rules, guiding the process of constitution and coordination of attributed meanings. (...) Then, using the tools of systems theory and applying them to empirical results of ethnomethodology and conversation analysis, it is shown how the rule scheme is integrated in a triadic sequence, functioning on three different levels of communication. Finally, a specific form of repair after next turn is discussed, relating it to the function of preserving the structure of conversational types. The analysis of such conversational types opens a possible realm of cooperation between conversation analysis and Luhmann's version of systems theory. (shrink)

By examining the activity of direction-giving and asking we can discover some of the sequential and other structures which characterize the activity. The insertion sequence, as a sequential structure, can be found to be used by interactants in more than one way to accomplish different results. We can therefore consider the insertion sequence as a sequential structure and, by attending to the activity in which the interactants are engaged, discover the relation between sequential and activity system (...) structures. In this way we can relate what persons are doing and how they are doing it (i.e. the activity being accomplished in and through their talk) to some of the basic structures of conversational interaction (e.g. insertion sequences). (shrink)

This article uses transcriptions from video recordings of airline pilots at work, on actual flights, to consider some locations and the interactional significance of a feature of routine talk in the airline cockpit: and-prefaced turns. As pilots’ work is formally organized for them as many discrete and ordered tasks, and-prefacing is a local means for maintaining an ongoing sense of their conduct of a flight as a whole. By and-prefacing their talk, pilots present some new talk or task as connected (...) and relevantly next in a larger macro-sequence of work for their flight. And-prefacing is evidence of pilots’ orientation to a sense of sequence that can extend well beyond pairs of turns at talk and/or non-talk activities, or even a series of such paired sequences. It allows pilots to make salient the sequentiality of their work where the officially prescribed wordings they must use can leave this implicit. (shrink)