Signalling in auctions: Experimental evidence

Olivier Bos, Francisco Gomez-Martinez, Sander Onderstal and Tom Truyts

Journal of Economic Behavior & Organization, 2021, vol. 187, issue C, 448-469

Abstract: We study the relative performance of the first-price sealed-bid auction, the second-price sealed-bid auction, and the all-pay sealed-bid auction in a laboratory experiment where bidders can signal information through their bidding behaviour to an outside observer. We consider two different information settings: the auctioneer reveals either the identity of the winning bidder only, or she also reveals the bidders’ payments to an outside observer. We find that the all-pay sealed-bid auction in which the bidders’ payments are revealed outperforms the other mechanisms in terms of revenue, while this mechanism underperforms in terms of efficiency relative to the winner-pay auctions.

Keywords: Auctions; Signalling; Experiments (search for similar items in EconPapers)
JEL-codes: C92 D44 D82 (search for similar items in EconPapers)
Date: 2021
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Related works:
Working Paper: Signalling in auctions: Experimental evidence (2021)
Working Paper: Signalling in auctions: Experimental evidence (2021)
Working Paper: Signalling in Auctions: Experimental Evidence (2018)
Working Paper: Signaling in auctions: experimental evidence (2017)
Working Paper: Signaling in Auctions: Experimental Evidence (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:187:y:2021:i:c:p:448-469

DOI: 10.1016/j.jebo.2021.04.001

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