An Experimental Analysis of Parallel Multiple Auctions

Tim Hoppe ()
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Tim Hoppe: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg

No 8031, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: At online auction platforms we often observed that substitutable goods are auctioned concurrently with auctions ending at the same time. I introduce an experimental setup of three sellers and four buyers in an ascending second price auction environment where every seller runs one auction with a homogeneous good and the buyers are confronted with single unit demand. I find that sellers revenue is significantly lower than theory predicts due to the fact that some auctions did not receive bids whereas other auctions concentrated the bids of all bidders. Moreover, I observe a statistically higher revenue of sellers setting the minimum starting price. Furthermore, my study shows that the buyers submit bids which are significantly lower than the private valuation every buyer receives. Comparing the efficiency of the parallel multiple auction setup to a double auction control experiment, I find a significant lower efficiency in parallel multiple auctions due to the coordination failure of the buyers.

Keywords: simultaneous auctions; internet auctions; market design; electronic business (search for similar items in EconPapers)
JEL-codes: C92 D44 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2008-11
New Economics Papers: this item is included in nep-exp, nep-gth, nep-ict and nep-mkt
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Citations: View citations in EconPapers (4)

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