Analysis of certificate of entitlement bidding system in Singapore

Auctions are one of the important mechanisms in which optimal allocation to individuals can be achieved. In this paper, the COE bidding system was analyzed under the Independent Private Value model and thereafter categorized as a multiunit English auction. Comparisons between Singapore’s COE bidding...

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Main Author: Chua, Wei Feng
Other Authors: Bei Xiaohui
Format: Final Year Project
Language:English
Published: 2019
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Online Access:http://hdl.handle.net/10356/79020
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-790202023-02-28T23:12:02Z Analysis of certificate of entitlement bidding system in Singapore Chua, Wei Feng Bei Xiaohui School of Physical and Mathematical Sciences Science::Mathematics Auctions are one of the important mechanisms in which optimal allocation to individuals can be achieved. In this paper, the COE bidding system was analyzed under the Independent Private Value model and thereafter categorized as a multiunit English auction. Comparisons between Singapore’s COE bidding system and the vehicle license allocation system found in Shanghai, Beijing and Guangzhou were drawn upon and studied on in various papers. In terms of revealing their true valuations, bidders in Singapore are more likely to bid their true values than bidders in Shanghai. From an efficiency perspective, the lottery system in Beijing is generally inefficient and Singapore’s COE bidding system is slightly more efficient than the hybrid system in Guangzhou. A study by Zhou, Qi, Wang (2017) demonstrated the possibility of balancing efficiency and equality adopting a new mechanism. Therefore, we proposed a new auction format in which bidders with a monthly household income of less than $10000 were classified as priority group and the rest of the bidders were classified as normal group with 2 separate auctions being conducted in each group. To determine the efficiency and equality of this new auction format, a simulation was conducted, and observations suggest the possibility of increasing equality by randomizing the number of licenses allocated to the priority group using a Uniform, Normal and Exponential distributions in the range of [ /4,1] where represents the quota for the entire auction. However, this comes at the expense of a reduced efficiency of the auction. Bachelor of Science in Mathematics and Economics 2019-12-02T01:59:02Z 2019-12-02T01:59:02Z 2019 Final Year Project (FYP) http://hdl.handle.net/10356/79020 en 37 p. application/pdf
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Science::Mathematics
spellingShingle Science::Mathematics
Chua, Wei Feng
Analysis of certificate of entitlement bidding system in Singapore
description Auctions are one of the important mechanisms in which optimal allocation to individuals can be achieved. In this paper, the COE bidding system was analyzed under the Independent Private Value model and thereafter categorized as a multiunit English auction. Comparisons between Singapore’s COE bidding system and the vehicle license allocation system found in Shanghai, Beijing and Guangzhou were drawn upon and studied on in various papers. In terms of revealing their true valuations, bidders in Singapore are more likely to bid their true values than bidders in Shanghai. From an efficiency perspective, the lottery system in Beijing is generally inefficient and Singapore’s COE bidding system is slightly more efficient than the hybrid system in Guangzhou. A study by Zhou, Qi, Wang (2017) demonstrated the possibility of balancing efficiency and equality adopting a new mechanism. Therefore, we proposed a new auction format in which bidders with a monthly household income of less than $10000 were classified as priority group and the rest of the bidders were classified as normal group with 2 separate auctions being conducted in each group. To determine the efficiency and equality of this new auction format, a simulation was conducted, and observations suggest the possibility of increasing equality by randomizing the number of licenses allocated to the priority group using a Uniform, Normal and Exponential distributions in the range of [ /4,1] where represents the quota for the entire auction. However, this comes at the expense of a reduced efficiency of the auction.
author2 Bei Xiaohui
author_facet Bei Xiaohui
Chua, Wei Feng
format Final Year Project
author Chua, Wei Feng
author_sort Chua, Wei Feng
title Analysis of certificate of entitlement bidding system in Singapore
title_short Analysis of certificate of entitlement bidding system in Singapore
title_full Analysis of certificate of entitlement bidding system in Singapore
title_fullStr Analysis of certificate of entitlement bidding system in Singapore
title_full_unstemmed Analysis of certificate of entitlement bidding system in Singapore
title_sort analysis of certificate of entitlement bidding system in singapore
publishDate 2019
url http://hdl.handle.net/10356/79020
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