EDDS Business 12

8/9/2019 EDDS Business 12

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Event Driven

Dynamic Systems

Bujor PĂVĂLOIU

2014

University "Poite!nica" o Buc!arest#acuty o En$ineerin$ in #orei$n Lan$ua$es%aster Stu&ies in Business '&ministration an& En$ineerin$



2Event Driven Dynamic Systems

Dynamic SystemsDynamic Systems Discrete Event ExamplesDiscrete Event Examples Untimed DESUntimed DES Markov ChainsMarkov Chains Petri NetsPetri Nets Business Process ManagementBusiness Process Management Max-Plus lge!raMax-Plus lge!ra "ame #heory - Nash"ame #heory - Nash "ame #heory $ %ligopoly"ame #heory $ %ligopoly "ame #heory $ uctions"ame #heory $ uctions "ame #heory $ uctions& Bargaining"ame #heory $ uctions& Bargaining




#irst Price O(en )ry *En$is!+#irst Price O(en )ry *En$is!+

'ules - Each !idder is (ree to revise his !idup)ards* +hen no !idder )ishes to revise his !id(urther& the highest !idder )ins the o!,ect andpays his !id*

Strategies - players strategy is his series o(!ids as a (unction o( his value his prior estimate o( other players valuations the past !ids o( all the players*

#he !idding is updated as his in(ormation setchanges* Payo((s - #he )inners payo(( is his value minus

his highest !id* #he losers payo((s are .ero*




#irst Price O(en )ry E,am(e#irst Price O(en )ry E,am(e

#ime Step#ime Step // 00 11 22 33 44

BidderBidder StartStart BB CC CC

BidBid 0/0/ 0000 0101 0404 0505 1010

Max 6alueMax 6alue 0/0/ 0000 0101 0404 0505 1010

+inner+inner -- BB CC CC

PricePrice -- // // // // 1010

Start priceStart price

7'%N87'%N80/0/

'eserve price'eserve price




#irst Price Seae&-Bi& 'uctions#irst Price Seae&-Bi& 'uctions

'ules - Each !idder su!mits one !id& inignorance o( the other !ids* #he highest!idder pays his !id and )ins the o!,ect*

Strategies - players strategy is his !idas a (unction o( his value and his prior!elie(s a!out other players valuations

Payo((s - #he )inners payo(( is his valueminus his !id* #he losers payo((s are .ero*




#irst Price Seae&-Bi& E,am(e#irst Price Seae&-Bi& E,am(e

BidderBidder StartStart BB CC DD EE

BidBid 0/0/ 0000 0101 0303 0909 0000

Max 6alueMax 6alue -- 0909

+inner+inner -- DD

PricePrice -- // // // 0909 //


7'%N87'%N80/0/





Secon&-Price Seae&-Bi& *Vic.rey+

'ules - Each !idder su!mits one !id& inignorance o( the other !ids* #he !ids areopened& and the highest !idder pays theamount o( the second-highest !id and )insthe o!,ect*

Strategies - players strategy is his !idas a (unction o( his value and his prior

!elie( a!out other players valuations Payo((s - #he )inners payo(( is his valueminus the second-highest !id that )asmade* #he losers payo((s are .ero




Secon& Price Seae&-Bi&Secon& Price Seae&-Bi&E,am(eE,am(e

BidderBidder StartStart BB CC DD EE

BidBid 0/0/ 0000 0101 0303 1919 0000

Max 6alueMax 6alue -- 1919

Sec* 6alueSec* 6alue -- 0303

+inner+inner -- CC

PricePrice -- // // // 0303 //


7'%N87'%N80/0/





:n a second price sealed-!id auction& the:n a second price sealed-!id auction& theamount you !id determines )hether youamount you !id determines )hether you)in; it does not determine ho) much you)in; it does not determine ho) much you

pay i( you )in* :n these auctions you )antpay i( you )in* :n these auctions you )antto !id only )hen the amount you )ouldto !id only )hen the amount you )ouldhave to pay i( you )on is less than thehave to pay i( you )on is less than theitems value* :( you !id )hat the item isitems value* :( you !id )hat the item is)orth to you& you )ill )in i( and only i( the)orth to you& you )ill )in i( and only i( thesecond highest !id 7the amount you pay i(second highest !id 7the amount you pay i(victorious8 is less than )hat the item isvictorious8 is less than )hat the item is)orth*)orth*




Descen&in$ 'uctions *Dutc!+Descen&in$ 'uctions *Dutc!+

'ules - #he seller announces a !id& )hichhe continuously lo)ers until some !uyerstops him and takes the o!,ect at that

price* Strategies - players strategy is )hen tostop the !idding as a (unction o( hisvaluation and his prior !elie(s as to other

players valuations* Payo((s - #he )inners payo(( is his value

minus his !id* #he losers payo((s are .ero*




Dutc! 'uctions E,am(eDutc! 'uctions E,am(e

#ime Step#ime Step // 00 11 22 33 44

BidderBidder StartStart -- -- -- -- CC

BidBid 2/2/ 1919 1<1< 1=1= 1515 1414

+inner+inner -- -- -- -- -- CC

PricePrice -- // // // // 1414


7'%N87'%N82/2/

'eserve'eserve

priceprice

7'%N87'%N80/0/




'-Pay 'uction'-Pay 'uction

nn auctionauction in )hich all !idders must payin )hich all !idders must payregardless o( )hether they )in the pri.e&regardless o( )hether they )in the pri.e&)hich is a)arded to the highest !idder as)hich is a)arded to the highest !idder as

in a conventional auction*in a conventional auction* #he most straight(or)ard (orm o( an all-#he most straight(or)ard (orm o( an all-pay auction is apay auction is a /uoc. auction/uoc. auction& in )hich& in )hicheveryone su!mits a !id !ut !oth the loserseveryone su!mits a !id !ut !oth the losers

and the )inners pay their su!mitted !ids*and the )inners pay their su!mitted !ids* Do you see any resem!lance )ith aDo you see any resem!lance )ith a

lottery>lottery>




/uoc. 'uction E,am(e/uoc. 'uction E,am(e

BidderBidder BB CC DD EE

BidBid 11 33 44 55 33

Max 6alueMax 6alue 55

+inner+inner DD

PricePrice 1010

PaidPaid 11 33 44 55 33


7'%N87'%N8//

'eserve'eserve

priceprice

7'%N87'%N8

0/0/




)!arity 'uction)!arity 'uction

Charity auctions are events )here goodsCharity auctions are events )here goodsor services are sold to the highest !idderor services are sold to the highest !idderin order to raise money (or some type o(in order to raise money (or some type o(

charita!le causecharita!le cause

7it should have a speci(ic7it should have a speci(ic

goal that is likely to !ene(it the communitygoal that is likely to !ene(it the communityin some manner8in some manner8

Some useSome use private valueprivate value goodsgoods

7collecti!les& movie stars !elongings& etc* 87collecti!les& movie stars !elongings& etc* 8 :t is organi.ed usually as a:t is organi.ed usually as a living auctionliving auction

or aor a silent auctionsilent auction**




Sient 'uctionSient 'uction

#ype o( sealed auction o(ten used in charity#ype o( sealed auction o(ten used in charityevents& !ut involving the simultaneousevents& !ut involving the simultaneous

sale o( multiple items* Participants su!mitsale o( multiple items* Participants su!mit!ids normally on paper& near the item*!ids normally on paper& near the item*#hey may or may not kno) ho) many#hey may or may not kno) ho) manyother people are !idding or )hat their !idsother people are !idding or )hat their !idsare* * #he highest !idder pays the priceare* * #he highest !idder pays the price

they su!mittedthey su!mitted




everse (rocurement auctioneverse (rocurement auction

#his kind o( auction reverses the roles o(#his kind o( auction reverses the roles o(seller and !uyer* #he !uyer puts out anseller and !uyer* #he !uyer puts out an

'e?uest (or @uotation'e?uest (or @uotation (or a given(or a givencommodity and providers o((ercommodity and providers o((erprogressively lo)er prices in hopes o(progressively lo)er prices in hopes o(getting the !usiness* t the end o( thegetting the !usiness* t the end o( theauction& the lo)est !id )ins*auction& the lo)est !id )ins*




Buy-out auctionBuy-out auction

#his auction has a predetermined !uy-out#his auction has a predetermined !uy-outprice in )hich the !idder can end theprice in )hich the !idder can end the

auction !y accepting the !uy-out price*auction !y accepting the !uy-out price*#he !uy-out price is set !y the seller* #he#he !uy-out price is set !y the seller* #he!idder can choose to !id or use the !uy-!idder can choose to !id or use the !uy-out option* :( no !idder chooses to utili.eout option* :( no !idder chooses to utili.ethe !uy-out option& the auction ends )iththe !uy-out option& the auction ends )ith

the highest !idder )inning the auction*the highest !idder )inning the auction*




Sient auctionSient auction

#ype o( sealed auction o(ten used in charity#ype o( sealed auction o(ten used in charityevents& !ut involving the simultaneousevents& !ut involving the simultaneous

sale o( multiple items* Participants su!mitsale o( multiple items* Participants su!mit!ids normally on paper& near the item*!ids normally on paper& near the item*#hey may or may not kno) ho) many#hey may or may not kno) ho) manyother people are !idding or )hat their !idsother people are !idding or )hat their !idsare* * #he highest !idder pays the priceare* * #he highest !idder pays the price

they su!mittedthey su!mitted




)om3inatoria 'uction)om3inatoria 'uction

:n some cases& a !uyerAs value (or the:n some cases& a !uyerAs value (or the

goods that are up (or auction is a complexgoods that are up (or auction is a complex

interaction o( the type and num!er o(interaction o( the type and num!er o(

goods he receives 7kno)n as a !undle8*goods he receives 7kno)n as a !undle8*ailing to purchase some components )illailing to purchase some components )ill

not give him the satis(action (or thenot give him the satis(action (or the

!uying& so all goods )ill !e sold!uying& so all goods )ill !e sold

simultaneously and the !uyers )ill !esimultaneously and the !uyers )ill !eallo)ed to su!mit !ids on com!inations o(allo)ed to su!mit !ids on com!inations o(

goodsgoods




Interna 'uctionsInterna 'uctions

ou can use auctions to re)ard and motivateou can use auctions to re)ard and motivateemployees* +e have previously discussed theemployees* +e have previously discussed thedi((iculty o( determining ?uotas (or salespeopledi((iculty o( determining ?uotas (or salespeople)hen you dont have enough in(ormation to)hen you dont have enough in(ormation to

(igure out ho) much each should sell* ou could(igure out ho) much each should sell* ou coulduse auctions rather than ?uotas to assign salesuse auctions rather than ?uotas to assign salesareas* or example& i( a ne) area opens up& youareas* or example& i( a ne) area opens up& youcould auction it o(( to all your salespeople& )ithcould auction it o(( to all your salespeople& )iththe person )illing to pay the most getting thethe person )illing to pay the most getting the

area* #he auction )ould not only !ring in moneyarea* #he auction )ould not only !ring in money!ut )ould also result in the area going to the!ut )ould also result in the area going to themost con(ident salespeoplemost con(ident salespeople




Liui&ation 'uctionsLiui&ation 'uctions

Fi?uidation re(ers to the process !yFi?uidation re(ers to the process !y)hich a company 7or part o( a)hich a company 7or part o( acompany8 is !rought to an end& andcompany8 is !rought to an end& and

the assets and property o( thethe assets and property o( thecompany redistri!uted*Gcompany redistri!uted*G Compulsory li?uidationCompulsory li?uidation

6oluntary li?uidation6oluntary li?uidation

Fi?uidatorFi?uidator




eBayeBay

'uction-stye istin$s'uction-stye istin$s allo) the seller to o((er one orallo) the seller to o((er one ormore items (or sale (or a speci(ied num!er o( days* #hemore items (or sale (or a speci(ied num!er o( days* #heseller can esta!lish aseller can esta!lish a reserve pricereserve price**

#i,e& Price ormat#i,e& Price ormat allo)s the seller to o((er one or moreallo)s the seller to o((er one or moreitems (or sale at aitems (or sale at a Buy It Now Buy It Now price* Buyers )ho agree toprice* Buyers )ho agree topay that price )in the auction immediately )ithoutpay that price )in the auction immediately )ithout

su!mitting a !id*su!mitting a !id* #i,e& Price ormat 5it! Best Oer#i,e& Price ormat 5it! Best Oer allo)s the seller toallo)s the seller toaccept !est o((ers* :( a !uyer su!mits a !est o((er& the selleraccept !est o((ers* :( a !uyer su!mits a !est o((er& the sellereither re,ects or accepts the !est o((er* :( the !est o((er iseither re,ects or accepts the !est o((er* :( the !est o((er isnot satis(actory& a seller may su!mit a counter o((er to thenot satis(actory& a seller may su!mit a counter o((er to the!uyer* Best o((er is not availa!le (or auction style listings* :n!uyer* Best o((er is not availa!le (or auction style listings* :naddition& !est o((er is not availa!le in every category*addition& !est o((er is not availa!le in every category*Sellers also meet speci(ic re?uirements in order to sell )ithSellers also meet speci(ic re?uirements in order to sell )ith!est o((er*!est o((er*

Dutc! 'uctionsDutc! 'uctions allo) the seller to o((er t)o or moreallo) the seller to o((er t)o or moreidentical items in the same auction* Bidders can !id (or anyidentical items in the same auction* Bidders can !id (or anynum!er (rom one item up to the total num!er o((ered*num!er (rom one item up to the total num!er o((ered*




'uction-stye istin$s (ro,y'uction-stye istin$s (ro,y3i&&in$3i&&in$

is essentiay euivaent to ais essentiay euivaent to a Vic.rey auctionVic.rey auction665it! t!e oo5in$ e,ce(tions5it! t!e oo5in$ e,ce(tions

/!ere e,ists a/!ere e,ists a Bi& IncrementBi& Increment /!e/!e 5innin$ 3i&&er (ays t!e secon&-!i$!est5innin$ 3i&&er (ays t!e secon&-!i$!est

3i& (us one 3i& increment amount3i& (us one 3i& increment amount6 instea& o6 instea& o

sim(y t!e secon&-!i$!est 3i&7 Since t!e 3i&sim(y t!e secon&-!i$!est 3i&7 Since t!e 3i&increment amounts are insi$niicant com(are&increment amounts are insi$niicant com(are&to t!e 3i& si8e6 t!ey are not consi&ere& rom ato t!e 3i& si8e6 t!ey are not consi&ere& rom astrate$ic stan&(oint7strate$ic stan&(oint7

/!e current/!e current 5innin$ 3i& is not seae&5innin$ 3i& is not seae&6 3ut6 3ut

instea& is a5ays &is(aye&7 9o5ever6 at anyinstea& is a5ays &is(aye&7 9o5ever6 at any$iven moment6 t!e !i$!est 3i&&er:s 3i& is not$iven moment6 t!e !i$!est 3i&&er:s 3i& is notnecessariy &is(aye&6 since t!is amount maynecessariy &is(aye&6 since t!is amount may3e !i$!er t!an t!e amount reuire& to 5in t!e3e !i$!er t!an t!e amount reuire& to 5in t!eauction7auction7




Pro,y Bi&&in$ E,am(ePro,y Bi&&in$ E,am(e

BidderBidder StartStart BB BB DD BB

6alue6alue 00 22 11 1*91*9 2*02*0 ==

Max 6alueMax 6alue 00 22 22 22 2*02*0 ==

+inner+inner -- DD BB

11ndnd %((er%((er -- StartStart 11 1*91*9 22 2*02*0

PricePrice -- 00 1*01*0 22 2*02*0 2*12*1

Minim BidMinim Bid 0*00*0 0*00*0 1*11*1 2*02*0 2*12*1 2*22*2


7'%N87'%N800

:ncrement:ncrement7'%N87'%N8

/*0/*0




Buyer ProtectionBuyer Protection

;;Stu&y t!e seer:s ee&3ac. (a$e7<Stu&y t!e seer:s ee&3ac. (a$e7< ;; =ever6 never6 never 3uy rom a=ever6 never6 never 3uy rom a

seer 5it! 8ero ee&3ac.7 't!ou$!seer 5it! 8ero ee&3ac.7 't!ou$!

everyone !as to start some5!ere6 aeveryone !as to start some5!ere6 a8ero ee&3ac. ratin$ is a !u$e re&8ero ee&3ac. ratin$ is a !u$e re&a$7 'nyone sein$ on eBay s!ou& ata$7 'nyone sein$ on eBay s!ou& ateast !ave some !istory even as aeast !ave some !istory even as a

3uyer7<3uyer7< )onsi&er t!e seer ratin$s)onsi&er t!e seer ratin$s




Seer atin$sSeer atin$s :n 1//=& eBay !egan using detailed seller ratings )ith (our:n 1//=& eBay !egan using detailed seller ratings )ith (our

di((erent categoriesHdi((erent categoriesH Item as &escri3e&Item as &escri3e& )ommunication)ommunication S!i((in$ timeS!i((in$ time

S!i((in$ an& !an&in$ c!ar$esS!i((in$ an& !an&in$ c!ar$es +hen leaving (eed!ack& !uyers are asked to rate the seller in+hen leaving (eed!ack& !uyers are asked to rate the seller ineach o( these categories )ith a score o( one to (ive stars& )itheach o( these categories )ith a score o( one to (ive stars& )ith(ive !eing the highest rating and one the lo)est*(ive !eing the highest rating and one the lo)est*

#he ratings are anonymous#he ratings are anonymous; neither sellers nor other users; neither sellers nor other userslearn ho) individual !uyers rated the seller*learn ho) individual !uyers rated the seller*

#he listings o( sellers )ith a#he listings o( sellers )ith a rating o( 3*2 or !elo) in any o(rating o( 3*2 or !elo) in any o(the (our rating categories appear lo)er in search resultsthe (our rating categories appear lo)er in search results**

Po)er SellersPo)er Sellers are re?uired to have scores in each categoryare re?uired to have scores in each categorya!ove 3*4a!ove 3*4




Seer ProtectionSeer Protection

Sellers arenAt a!le to leave negative eed!ack (orSellers arenAt a!le to leave negative eed!ack (or!uyers& !utH!uyers& !utH

Sellers can addSellers can add 3uyer reuirements3uyer reuirements to theirto theirlistings to prevent un)anted !idders 7they canlistings to prevent un)anted !idders 7they can!lock !uyers )ith too many policy violations&!lock !uyers )ith too many policy violations&unpaid items& or )ho arenAt registered )ith PayPal8unpaid items& or )ho arenAt registered )ith PayPal8

Sellers can re?uireSellers can re?uire 3uyers to (ay ri$!t a5ay3uyers to (ay ri$!t a5ay 7Buy :t No) auction87Buy :t No) auction8

Sellers haveSellers have t!e seer re(ortin$ !u3t!e seer re(ortin$ !u3 to reportto reportan unpaid item& eed!ack extortion& or any otheran unpaid item& eed!ack extortion& or any other

pro!lem )ith a !uyer*pro!lem )ith a !uyer* eed!ack iseed!ack is remove& rom sus(en&e& 3uyersremove& rom sus(en&e& 3uyers




)!eatin$ in eectronic auction)!eatin$ in eectronic auctionBy Buyer Bi&&er Multiple !idding* !idder can place multiple !ids on the

same item using di((erent aliases* Bid shading* #he sealed-!id auctions do not reveal the !ids

!e(ore auction clears* !idder may adopt some un(air )aysto examine the !ids and revise his !id to )in the auction ata minimum price (ar !elo) his valuation*

'ings* group o( !idders (orm a coalition called the ring*#hese ring mem!ers collude not to compete )ith eachother and do not raise the price o( the o!,ect*

By Seer 'uctioneer Shill !idding* corrupt seller appoints (ake !idders 7shills8

)ho place !ids to increase the price o( the item )ithout anyintention o( !uying it*

alse !ids* seller cheats in a second-price sealed-!idauction !y looking at the !ids !e(ore the auction clears andsu!mitting an extra !id ,ust !elo) the price o( the highest!id*




Bi& Sni(in$Bi& Sni(in$

Strategy employed !y !idders )ho place theirStrategy employed !y !idders )ho place theirmaximum !id in the (inal seconds o( an auction*maximum !id in the (inal seconds o( an auction*

'easons (or doing thisH'easons (or doing thisH :nexperienced Bidders - those )ho continually:nexperienced Bidders - those )ho continually

raise their !ids to maintain high !idder status*raise their !ids to maintain high !idder status* Shill Bidding - #he illegal and unethical practice o(Shill Bidding - #he illegal and unethical practice o(

a seller !umping up the price o( hisIher o)na seller !umping up the price o( hisIher o)n

auctions*auctions* Bid Buddies - #hose )ho shado) experiencedBid Buddies - #hose )ho shado) experienced

!uyers to (ind deals o( real value*!uyers to (ind deals o( real value*




9ome5or.9ome5or.

Design an auction (or a certainDesign an auction (or a certain

product 7it can !e imaginaryproduct 7it can !e imaginary

)hatsoever8)hatsoever8

naly.e the parties& choose analy.e the parties& choose a

method to organi.e it& avoid cheatingmethod to organi.e it& avoid cheating

or descri!e a clever method to door descri!e a clever method to do

itJ8itJ8

Documents

EDDS Business 12