Vickrey auction vs BDM: difference in bidding behaviour and the impact of other-regarding motives

Niall Flynn, Christopher Kah () and Rudolf Kerschbamer
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Niall Flynn: Innsbruck University
Christopher Kah: Innsbruck University

Journal of the Economic Science Association, 2016, vol. 2, issue 2, No 2, 108 pages

Abstract: Abstract In an experiment, we first elicit the distributional preferences of subjects and then let them bid for a lottery, either in a Becker–DeGroot–Marschak (BDM) mechanism or a Vickrey auction (VA). The standard theory predicts that altruistic subjects underbid in the VA—compared to the BDM—while spiteful subjects overbid in the VA. The data do not confirm those predictions. While we observe aggregate underbidding in the VA, the result is not driven by the choices of altruistic subjects.

Keywords: Distributional preferences; BDM; Vickrey auction (search for similar items in EconPapers)
JEL-codes: C72 C91 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (10)

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Working Paper: Vickrey Auction vs BDM: Difference in bidding behaviour and the impact of other-regarding motives (2015)
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DOI: 10.1007/s40881-016-0027-5

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