Research

Abstract: Sequential descending (Dutch) auctions are a frequently adopted mechanism for clearing perishable inventory under tight deadlines, yet how they fare against efficient alternatives when buyers behave strategically remains largely unquantified. Using transaction-level data from one of Japan's largest wholesale flower markets, we document two patterns in buyers' dynamic behavior: strategic delay when inventory is abundant, and scarcity-driven herding as remaining supply declines. We develop a sequential multi-unit Dutch auction model that captures these motives and estimate the distribution of buyer valuations and market thickness. Counterfactual simulations show that the sequential Dutch auction concedes only about 2% in expected revenue on average to efficient alternatives (repeated or tie-break auctions) but delivers the lower revenue volatility. It also earns higher expected revenue than an optimally set static posted price in aggregate across market conditions, while wasting less inventory. We further show that the sequential Dutch auction becomes the fastest format to clear the market after a costless change to its clock rule that leaves bidding behavior untouched. These findings suggest that the sequential Dutch auction is an undominated compromise for sellers facing foward-looking buyers, demand uncertainty, and strict clearing deadlines.

Abstract: This paper documents the impact of a simple and universally applicable auction innovation: moving online. We leverage bid-level data from an offline-to-online transition of state mineral lease auctions, the features of which facilitate a detailed study. Controlling for auction heterogeneity, we find a large revenue difference in favor of online auctions, explained by a large increase in the number of bidders. Directly examining bidders’ identities reveals an inflow of new participants who had not participated before the transition. We do not detect different post-auction outcomes between new and existing participants. Where not yet adopted, online auctions are well worth consideration. 

Abstract: TBA

Abstract: This study quantifies how contract duration influences buyers' willingness-to-pay (WTP) when they hold real options that allow them to flexibly time consumption in response to changing market conditions. Using contract data from the US timber industry, we show that buyers delay consumption to manage payoff risk. This behavior generates heterogeneous WTP across buyers. We use structural estimation to uncover the key parameters underlying the incentive to delay consumption. Using these estimates, we conduct counterfactual simulations to measure how longer contract durations shift WTP and to clarify the boundary conditions linked to project size, buyer composition, and market trends. The counterfactual simulations reveal that extending contract duration from 3 to 4 years raises seller revenue by 9-13%, with effects amplified for larger projects and high-type buyers during the upward market trend.