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Istanbul Flower Auction: The Need for Speed

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  • Isa Hafalir
  • Donglai Luo
  • Cong Tao

Abstract

We examine the unique format of the Istanbul Flower Auction and compare it to traditional Dutch and English auctions, emphasizing the need to auction large volumes rapidly. In a model with time costs, we study how this auction format, which cleverly combines Dutch and English auction mechanisms, manages time costs by dynamically adapting to initial bidding behaviors. Our numerical analysis considers specific time cost functions and reveals the high performance of the Istanbul Flower Auction in comparison to standard auction formats, in terms of both auctioneer and bidder utilities. This work highlights the critical role of auction design in improving social welfare, particularly in scenarios demanding the quick sale of numerous lots.

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  • Isa Hafalir & Donglai Luo & Cong Tao, 2024. "Istanbul Flower Auction: The Need for Speed," Papers 2404.08288, arXiv.org.
    • Handle: RePEc:arx:papers:2404.08288
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    References listed on IDEAS

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    3. Anthony M. Kwasnica & John O. Ledyard & Dave Porter & Christine DeMartini, 2005. "A New and Improved Design for Multiobject Iterative Auctions," Management Science, INFORMS, vol. 51(3), pages 419-434, March.
    4. Paul Klemperer, 1999. "Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-286, July.
    5. Paul Klemperer, 2004. "Auctions: Theory and Practice," Online economics textbooks, SUNY-Oswego, Department of Economics, number auction1.
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