Multi-unit common value auctions: a laboratory experiment with three sealed-bid mechanisms

Joakim Ahlberg ()
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Joakim Ahlberg : VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

No 2012:23, Working papers in Transport Economics from CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: This study addresses a discrete common value environment with independent (one-dimensional) private signals, where the seller offers two identical units and the buyers have (flat) demand for both. Each session is conducted with 2, 3 or 4 buyers. Three auction formats are used: the discriminatory, uniform and Vickrey auctions which are all subjected to a variation in the number of bidders and to repeating bid rounds on each subject. The main findings are that there are no significant differences between the uniform and the discriminatory auction in collecting revenue, while the Vickrey auction comes out as inferior. More bidders in the auction result in a greater revenue and level out the performance across the mechanisms. Demand reduction is visible in the experiment, but it is not as prominent as anticipated. Moreover, subjects come closer to equilibrium play over time. Finally, the winner's curse is less severe than what is reported for inexperienced bidders in other studies.

Keywords: Laboratory experiment; Multi-unit auction; Common value auction (search for similar items in EconPapers)
JEL-codes: C72 C91 D44 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-11-05
New Economics Papers: this item is included in nep-cta and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ctswps:2012_023

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