Signaling in Auctions: Experimental Evidence

Olivier Bos, Francisco Gomez-Martinez, Sander Onderstal and Tom Truyts ()
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Tom Truyts: Saint-Louis University Brussels and University of Leuven, Belgium

No 17-053/VII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We study the relative performance of the first-price sealed-bid auction and the second-price sealed-bid auction in a laboratory experiment where bidders can signal information through their bidding behavior to an outside observer. We consider two different information settings: the auctioneer reveals either the identity of the winning bidder only, or she also reveals the winner’s payment to an outside observer. We find that the first-price sealed-bid auction in which the winner’s payment is revealed outperforms the other mechanisms in terms of revenue and efficiency. Our findings may have implications for the design of charity auctions, art auctions, and spectrum auctions.

Keywords: Auctions; Signaling; Experiments (search for similar items in EconPapers)
JEL-codes: C92 D44 D82 (search for similar items in EconPapers)
Date: 2017-06-20, Revised 2017-07-07
New Economics Papers: this item is included in nep-des and nep-exp
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https://papers.tinbergen.nl/17053.pdf (application/pdf)

Related works:
Journal Article: Signalling in auctions: Experimental evidence (2021)
Working Paper: Signalling in auctions: Experimental evidence (2021)
Working Paper: Signalling in auctions: Experimental evidence (2021)
Working Paper: Signalling in Auctions: Experimental Evidence (2018)
Working Paper: Signaling in auctions: experimental evidence (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20170053

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