The chopstick auction: A study of the exposure problem in multi-unit auctions

Florian Englmaier (), Pablo Guillén (), Loreto Llorente, Sander Onderstal () and Rupert Sausgruber

International Journal of Industrial Organization, 2009, vol. 27, issue 2, pages 286-291

Abstract: Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the "chopstick auction" in which bidders are confronted with the exposure problem. We do so both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is less efficient than the second-price sealed-bid auction and that it yields more [the same] revenue if bidders are inexperienced [experienced].

Keywords: Chopstick; auction; Exposure; problem; Laboratory; experiment; Second-price; sealed-bid; auction (search for similar items in EconPapers)
Date: 2009

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V8P ... 29fe354bb135a868974b
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions (2004)
Working Paper: The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:2:p:286-291

Access Statistics for this article

International Journal of Industrial Organization is edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Series data maintained by Heidi Boesdal ().