How obvious is the dominant strategy in an English Auction? Experimental evidence

Peter McGee and Dan Levin ()

Journal of Economic Behavior & Organization, 2019, vol. 159, issue C, 355-365

Abstract: Bidding one's value is a weakly dominant strategy (DS) in both English and second-price auctions (SPAs) with private values, but experimental studies find frequent and systematic deviations from the DS only in the latter. To explain the difference, Li (2017) proposes a stronger solution concept, obviously dominant strategies (ODS), that is present in English auctions but not SPAs. We introduce a treatment to English auctions that affects expected payoffs but not the DS. We observe little change in bidding in response to the manipulation in English auctions where the DS is also an ODS, whereas this manipulation has been shown to drastically affect bidding in SPAs (Georganas et al., 2017) where the DS is not an ODS.

Keywords: Auctions; Overbidding; Obvious dominant strategy (search for similar items in EconPapers)
JEL-codes: C92 D44 D82 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:159:y:2019:i:c:p:355-365

DOI: 10.1016/j.jebo.2019.02.003

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