Does jump bidding increase sellers’ revenue? Theory and experiment

Wooyoung Lim and Siyang Xiong

Journal of Economic Behavior & Organization, 2021, vol. 189, issue C, 84-110

Abstract: We consider an environment in which bidders decide whether to jump bids in a simple two-bidder ascending auction with independent private values. We compare two types of equilibria, one that involves jump bidding and another that does not. We show that the revenue in the jump bidding equilibrium dominates that in the no-jump equilibrium when bidders are risk averse. Isolating the revenue impact of jump bidding from that of overbidding, our experimental design allows us to demonstrate that sellers’ revenue increases due to jump bidding but only insignificantly so.

Keywords: English auction; Jump bidding; Risk aversion; Laboratory experiment (search for similar items in EconPapers)
JEL-codes: C12 C90 D44 D82 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:189:y:2021:i:c:p:84-110

DOI: 10.1016/j.jebo.2021.06.026

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