Competition and Cooperation in Divisible Good Auctions: An Experimental Examination

Orly Sade, Charles Schnitzlein and Jaime F. Zender
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Orly Sade: Jerusalem School of Business, Hebrew University of Jerusalem
Charles Schnitzlein: College of Business, University of Central Florida
Jaime F. Zender: Leeds School of Business, University of Colorado at Boulder

No 2004.15, Working Papers from Fondazione Eni Enrico Mattei

Abstract: An experimental approach is used to examine the performance of three different multi-unit auction designs: discriminatory, uniform-price with fixed supply, and uniform-price with endogenous supply. We find that the strategies of the individual bidders and the aggregate demand curves are inconsistent with theoretically identified equilibrium strategies. The discriminatory auction is found to be more susceptible to collusion than are the uniform-price auctions, and so contrary to theoretical predictions and previous experimental results, the discriminatory auction provides the lowest average revenue. Consistent with theoretical predictions, bidder demands are more elastic with reducible supply or discriminatory pricing than in the uniform-price auction with fixed supply. Despite a lack of a priori differences across bidders, the discriminatory auction results in significantly more symmetric allocations.

Keywords: Divisible good; Auctions; Experimental economics (search for similar items in EconPapers)
JEL-codes: C90 D44 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-com, nep-exp and nep-mic
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:fem:femwpa:2004.15

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