Computational simulation on auction pricing of property rights based on the wealth utility

YANG Zhong-zhi, PENG Jun-wei

Systems Engineering - Theory & Practice ›› 2012, Vol. 32 ›› Issue (2) : 299-305.

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中国科学院数学与系统科学研究院期刊网
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Systems Engineering - Theory & Practice ›› 2012, Vol. 32 ›› Issue (2) : 299-305. DOI: 10.12011/1000-6788(2012)2-299

Computational simulation on auction pricing of property rights based on the wealth utility

  • YANG Zhong-zhi, PENG Jun-wei
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Abstract

The bargaining pricing model is built by constructing the wealth utility function of property right price; the equation of weighted marginal utility zero-sum for solving the equilibrium price of property right is derived. In the light of di erences of preferences and expectation values to property right of buyers, the equilibrium prices of bargaining is solved by means of the di erent equations of weighted marginal utility zero-sum of seller and buyers with a numerical case, and the maximum equilibrium price is chosen as the winner reference price. The wealth utilities and welfare function level of the seller and the winners at di erent winner prices are computed, by the comparison of the computed results, only the maximum equilibrium price has the highest welfare function level and highest market e ciency. And if the winner price is higher than the maximum expected value of the property right, the welfare function level is negative, it is so called "Winner's curse". At last, the e ect of wealth power of a buyer for target property right on equilibrium price is initially discussed, which result conforms to common rule.

Key words

auction of property right / wealth utility function / weighted marginal utility zero-sum equation / market e ciency / wealth e ect

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YANG Zhong-zhi, PENG Jun-wei. Computational simulation on auction pricing of property rights based on the wealth utility. Systems Engineering - Theory & Practice, 2012, 32(2): 299-305 https://doi.org/10.12011/1000-6788(2012)2-299

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