EXPERIMENTAL EVIDENCE ON ENGLISH AUCTIONS: ORAL OUTCRY VERSUS CLOCK

Ricardo Gonçalves and John Hey

Chapter 20 in Experiments in Economics:Decision Making and Markets, 2018, pp 427-466 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner’s curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.

Keywords: Experimental Economics; Risk; Ambiguity; Markets; Auctions; Bargaining; Econometrics; Methodology (search for similar items in EconPapers)
JEL-codes: C90 (search for similar items in EconPapers)
Date: 2018
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Journal Article: EXPERIMENTAL EVIDENCE ON ENGLISH AUCTIONS: ORAL OUTCRY VERSUS CLOCK (2011)
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