Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions
This research deviates from usual studies in auction literature primarily focused on maximizing expected revenue. Instead, we concentrate on the strategic design of discrete Dutch auctions in the context of bidder emotional attachment, wherein valuations follow a lognormal distribution. Our objecti...
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| Format: | Article |
| Language: | English |
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Nigerian Society of Physical Sciences
2025-02-01
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| Series: | Journal of Nigerian Society of Physical Sciences |
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| Online Access: | https://journal.nsps.org.ng/index.php/jnsps/article/view/2291 |
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| author | Raja Aqib Shamim Majid Khan Majahar Ali |
| author_facet | Raja Aqib Shamim Majid Khan Majahar Ali |
| author_sort | Raja Aqib Shamim |
| collection | DOAJ |
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This research deviates from usual studies in auction literature primarily focused on maximizing expected revenue. Instead, we concentrate on the strategic design of discrete Dutch auctions in the context of bidder emotional attachment, wherein valuations follow a lognormal distribution. Our objective is to attain an optimal balance between the auctioned object’s selling price and the auction duration, ultimately maximizing the auctioneer’s expected revenue per unit of time. Our proposed models exhibit significantly higher average revenues per unit of time than counterparts neglecting time considerations and emotional attachment of the bidders. This achievement results from strategically reducing auction durations, enabling more auctions within the allotted time. This intentional trade-off ensures the marginal revenue decrease in shorter auctions is surpassed by the substantial increase in overall revenues from heightened auction frequency. Numerical results emphasize the utility of our modified discrete Dutch auction design, particularly in scenarios with a large number of bidders. Furthermore, increasing skewness in valuation distributions correlates with higher revenue per unit of time. Complete knowledge of the number of participating bidders is crucial, leading to a noticeable elevation in the auctioneer’s expected revenue per unit of time. However, the predictability of auction outcomes may be challenging, underscoring the nuanced nature of auction dynamics.
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| format | Article |
| id | doaj-art-356c3196154c41ccb9286ad99eb59f18 |
| institution | Kabale University |
| issn | 2714-2817 2714-4704 |
| language | English |
| publishDate | 2025-02-01 |
| publisher | Nigerian Society of Physical Sciences |
| record_format | Article |
| series | Journal of Nigerian Society of Physical Sciences |
| spelling | doaj-art-356c3196154c41ccb9286ad99eb59f182025-01-17T18:52:27ZengNigerian Society of Physical SciencesJournal of Nigerian Society of Physical Sciences2714-28172714-47042025-02-017110.46481/jnsps.2025.2291Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributionsRaja Aqib Shamim0https://orcid.org/0000-0002-2531-1249Majid Khan Majahar Ali1https://orcid.org/0000-0002-5558-5929School of Mathematical Sciences, Universiti Sains Malaysia, 11800, Pulau Penang, Malaysia | Department of Mathematics, University of Kotli, 11100, Azad Jammu and Kashmir, PakistanSchool of Mathematical Sciences, Universiti Sains Malaysia, 11800, Pulau Penang, Malaysia This research deviates from usual studies in auction literature primarily focused on maximizing expected revenue. Instead, we concentrate on the strategic design of discrete Dutch auctions in the context of bidder emotional attachment, wherein valuations follow a lognormal distribution. Our objective is to attain an optimal balance between the auctioned object’s selling price and the auction duration, ultimately maximizing the auctioneer’s expected revenue per unit of time. Our proposed models exhibit significantly higher average revenues per unit of time than counterparts neglecting time considerations and emotional attachment of the bidders. This achievement results from strategically reducing auction durations, enabling more auctions within the allotted time. This intentional trade-off ensures the marginal revenue decrease in shorter auctions is surpassed by the substantial increase in overall revenues from heightened auction frequency. Numerical results emphasize the utility of our modified discrete Dutch auction design, particularly in scenarios with a large number of bidders. Furthermore, increasing skewness in valuation distributions correlates with higher revenue per unit of time. Complete knowledge of the number of participating bidders is crucial, leading to a noticeable elevation in the auctioneer’s expected revenue per unit of time. However, the predictability of auction outcomes may be challenging, underscoring the nuanced nature of auction dynamics. https://journal.nsps.org.ng/index.php/jnsps/article/view/2291AuctionsLognormal distributionNonlinear programmingDiscrete Dutch auctionRevenue optimization |
| spellingShingle | Raja Aqib Shamim Majid Khan Majahar Ali Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions Journal of Nigerian Society of Physical Sciences Auctions Lognormal distribution Nonlinear programming Discrete Dutch auction Revenue optimization |
| title | Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions |
| title_full | Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions |
| title_fullStr | Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions |
| title_full_unstemmed | Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions |
| title_short | Optimizing discrete dutch auctions with time considerations: a strategic approach for lognormal valuation distributions |
| title_sort | optimizing discrete dutch auctions with time considerations a strategic approach for lognormal valuation distributions |
| topic | Auctions Lognormal distribution Nonlinear programming Discrete Dutch auction Revenue optimization |
| url | https://journal.nsps.org.ng/index.php/jnsps/article/view/2291 |
| work_keys_str_mv | AT rajaaqibshamim optimizingdiscretedutchauctionswithtimeconsiderationsastrategicapproachforlognormalvaluationdistributions AT majidkhanmajaharali optimizingdiscretedutchauctionswithtimeconsiderationsastrategicapproachforlognormalvaluationdistributions |