Journal
ECONOMETRICA
Volume 69, Issue 2, Pages 413-454Publisher
BLACKWELL PUBL LTD
DOI: 10.1111/1468-0262.00197
Keywords
multi-unit demand auctions; uniform price auction; dynamic Vickrey auction; demand reduction; experiment
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We experimentally investigate the sensitivity of bidders demanding multiple units of a homogeneous commodity to the demand reduction incentives inherent in uniform price auctions. There is substantial demand reduction in both sealed bid and ascending price clock auctions with feedback regarding rivals' drop-out prices. Although both auctions have the same normal form representation, bidding is much closer to equilibrium in the ascending price auctions. We explore the behavioral process underlying these differences along with dynamic Vickrey auctions designed to eliminate the inefficiencies resulting from demand reduction in the uniform price auctions.
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