Efficiency in Second-Price Auctions: A New Look at Old Data

Rodney Garratt and John Wooders

University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara

Abstract: The experimental economics literature on second-price sealed-bid private value auctions has established that subjects typically bid more than their value, despite the fact that value bidding is a dominant strategy in such auctions. Moreover, the laboratory evidence shows that subjects do not learn to bid their values as they gain more experience. In the present paper, we re-examine the second-price auction data from Kagel and Levin’s (1993) classic paper. We find that auction efficiency is rising over time, even though the frequency of overbidding is unchanged. We argue that the rise in efficiency is due to a decline in the variability of overbidding. This is consistent with subjects learning to bid more like each other.

Date: 2004-02-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.escholarship.org/uc/item/5d86p46d.pdf;origin=repeccitec (application/pdf)

Related works:
Journal Article: Efficiency in Second-Price Auctions: A New Look at Old Data (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdl:ucsbec:qt5d86p46d

Access Statistics for this paper

More papers in University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().