Ascending prices and package bidding: Further experimental analysis

John Kagel, Yuanchuan Lien and Paul Milgrom

Games and Economic Behavior, 2014, vol. 85, issue C, 210-231

Abstract: We explore the performance of multi-round, price-guided combinatorial auctions for a previously untested class of value profiles in which synergies arise from shared fixed costs. We find that, in many cases, a simulator that bids straightforwardly does well in predicting auction performance, but exceptions arise because human bidders sometimes rely on cues besides prices to guide their package selection and because they sometimes bid aggressively on items for which they have no value in order to increase payments by bidders seeking complementary packages. In our experiments, this latter behavior not only raises prices, but can also improve efficiency by mitigating the threshold problem. Comparisons between a combinatorial clock auction (CCA) and a simultaneous ascending auction (SAA) are reported.

Keywords: Package auctions; SAA auctions; CCA auctions; Threshold problem (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:85:y:2014:i:c:p:210-231

DOI: 10.1016/j.geb.2014.02.006

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