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

Florian Englmaier, Pablo Guillen, Loreto Llorente, Sander Onderstal and Rupert Sausgruber

International Journal of Industrial Organization, 2009, vol. 27, issue 2, 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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions (2006)
Working Paper: The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:2:p:286-291

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