Elicited bid functions in (a)symmetric first-price auctions

Abdolkarim Sadrieh and Paul Pezanis-Christou

No 85, Working Papers from Barcelona School of Economics

Abstract: We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders' complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.

Keywords: asymmetric first-price auctions; private independent values; elicited bid functions; constant relative risk aversion; empirical best replies; experimental methods (search for similar items in EconPapers)
JEL-codes: C9 D44 (search for similar items in EconPapers)
Date: 2015-09
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Elicited bid functions in (a)symmetric first-price auctions (2003)
Working Paper: Elicited Bid Functions in a (a)Symmetric First-Price Auctions (2003)
Working Paper: Elicited Bid Functions in a (a)Symmetric First-Price Auctions (2003)
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