Informed entry in auctions

Diego Aycinena, Hernan Bejarano and Lucas Rentschler

International Journal of Game Theory, 2018, vol. 47, issue 1, No 7, 175-205

Abstract: Abstract We examine entry decisions in first-price and English clock auctions with participation costs. Potential bidders observe their value and report maximum willingness to pay (WTP) to participate. Entry occurs if revealed WTP (weakly) exceeds the randomly drawn participation cost. We find no difference in WTP between auction formats, although males have a higher WTP for first-price auctions. WTP is decreasing in the number of potential bidders, but this reduction is less than predicted and small in magnitude.

Keywords: Auctions; Endogenous entry; Experiments; Bidding (search for similar items in EconPapers)
JEL-codes: C72 C90 D44 D80 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s00182-017-0583-9

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