Stochastic Deadlines: A Comparison of Parallel Multiple Auction Designs

Sascha Füllbrunn (sascha.fullbrunn@ru.nl) and Tim Hoppe (tim.hoppe@ovgu.de)
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Tim Hoppe: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg

No 9015, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: In online auction platforms, offers are listed side by side and may end at the same point in time. While theoretical studies predict efficient coordination across auctions, experimental and empirical studies observe efficiency losses, i.e. goods remain unsold. In order to mitigate this coordination failure, we contribute to the literature of auction design by introducing a stochastic deadline in parallel multiple auctions. In these parallel Candle Auctions, several auctions start at the same time but end (separately) due to a stochastic process. We think that the stochastic ending rule decreases the coordination failure because the threat of a sudden termination forces the bidders to coordinate across auctions early in the auction process. Indeed, we find that coordination is less pronounced in parallel Candle Auctions resulting in higher efficiency

Keywords: Simultaneous Auctions; Internet; Auction Design; Experimental Economics (search for similar items in EconPapers)
JEL-codes: C92 D44 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-05
New Economics Papers: this item is included in nep-exp
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