Auctions For Complements –An Experimental Analysis
Daniel Marszalec
No CIRJE-F-1018, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo
Abstract:
I evaluate the performance of four static sealed-bid package auctions in an experimental setting with complementarities. The valuation model comprises two items, and three bidders: two `local bidders demand one item only, while the third (global) bidder only wants both. The rules I compare include the Vickrey and first-price auctions, Vickrey Nearest Rule and the Reference Rule. Auction-level tests find the first-price auction revenue dominant overall, while the Vickrey auction performs worst; the other two rules rank intermediate. Bidder-level tests of the experimental data reject the competitive equilibrium bidding functions: overbidding is widespread in all four auctions, and bidders are averse to submitting boundary bids. I also observe behaviour consistent with collusive bidding in the Vickrey auction. Contrary to theoretical predictions, the Vickrey auction performs worst on efficiency, primarily for this reason.
Pages: 49 pages
Date: 2016-07
New Economics Papers: this item is included in nep-com, nep-exp and nep-ger
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Citations: View citations in EconPapers (3)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2016cf1018
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