Elicited bid functions in (a)symmetric first-price auctions

Paul Pezanis-Christou () and Abdolkarim Sadrieh ()

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders' complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.

Keywords: Asymmetric first-price auctions; private independent values; elicited bid functions; constant relative risk aversion; empirical best replies; experimental methods (search for similar items in EconPapers)
JEL-codes: D44 C9 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-exp
Date: 2003-06-04
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Related works:
Working Paper: Elicited Bid Functions in a (a)Symmetric First-Price Auctions (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:aub:autbar:578.03

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