Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study

Christer Andersson (), Ola Andersson and Tommy Andersson ()
Additional contact information
Christer Andersson: Lund University, Postal: Department of Economics,P.O. Box 7082, SE-220 07 Lund, Sweden
Tommy Andersson: Lund University, Postal: Department of Economics, P.O. Box 7082, SE-220 07 Lund, Sweden

No 882, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper considers the sealed bid and ascending auction, which both identifies the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theortical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.

Keywords: Auctions; Non-manipulability; Efficiency; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-gth
Date: 2011-09-19
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Forthcoming as Andersson, Christer, Ola Andersson and Tommy Andersson, 'Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study' in Review of Economic Design.

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Related works:
Working Paper: Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study (2010)
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