The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions

Florian Englmaier, Pablo Guillen, Loreto Llorente, Sander Onderstal and Rupert Sausgruber

No 1782, CESifo Working Paper Series from CESifo

Abstract: Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the ‘chopstick auction’ in which bidders are confronted with the exposure problem. We do so both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is less efficient than the second-price sealed-bid auction and that it yields more [the same] revenue if bidders are inexperienced [experienced].

Keywords: chopstick auction; exposure problem; laboratory experiment; second-price sealed-bid auction (search for similar items in EconPapers)
JEL-codes: C90 D44 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-exp
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Related works:
Journal Article: The chopstick auction: A study of the exposure problem in multi-unit auctions (2009)
Working Paper: The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1782

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