Divisible-good uniform price auctions: the role of allocation rules and communication among bidders

Martin Sefton and Ping Zhang
Additional contact information
Ping Zhang: School of Economics, University of Nottingham

No 2009-21, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We use laboratory experiments to compare allocation rules in uniform price divisible good auctions. “Standard” and “uniform” allocation rules admit different types of low-price equilibria, which are eliminated by a “hybrid” rule. We observe little evidence of revenue differences among the allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate, and collusive when bidders can explicitly communicate. With explicit communication we find that collusive agreements are more fragile when the gain from a unilateral deviation is larger. We also find that the standard allocation rule is particularly vulnerable to collusive equilibria.

Keywords: experiment; uniform price auction; multi-unit auction; divisible-good auction; allocation rule; communication (search for similar items in EconPapers)
JEL-codes: C72 C92 D44 (search for similar items in EconPapers)
Date: 2009-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.nottingham.ac.uk/cedex/documents/papers/2009-21.pdf (application/pdf)

Related works:
Chapter: Divisible-good uniform price auctions: The role of allocation rules and communication among bidders (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:not:notcdx:2009-21

Access Statistics for this paper

More papers in Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC.
Bibliographic data for series maintained by Jose V Guinot Saporta ().