Individual Behaavior and Bidding Heterogeneity in Sealed Bid Auctions Where the Number of Bidders is Unknown
Svetlana Pevnitskaya and
Kurt Schnier ()
No wp2008_07_02, Working Papers from Department of Economics, Florida State University
This paper analyzes individual bidding data from a series of first price (FP) and second price (SP) sealed-bid auctions in which the number of bidders is unknown. In SP auctions we find a substantial amount of coincidence with theory. We observe systematic deviations from risk neutral bidding in FP auctions and show theoretically that these deviations are consistent with risk averse preferences. We find essentially no heterogeneity in bidding in SP auctions where risk preferences and the number of bidders do not affect the optimal bid, while in the FP auctions heterogeneity in bidding persists and increases with experience. We conclude that heterogeneity in bidding in FP auctions is consistent with heterogeneity in risk preferences, the attempt to count the number of bidders in the auction, and bidder specific noise. (JEL D44, C91)
Keywords: auctions; risk aversion (search for similar items in EconPapers)
JEL-codes: C91 D44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-gth and nep-upt
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https://coss.fsu.edu/econpapers/wpaper/wp2008_07_02.pdf First version, 2008-03 (application/pdf)
Journal Article: INDIVIDUAL BEHAVIOR AND BIDDING HETEROGENEITY IN SEALED BID AUCTIONS WHERE THE NUMBER OF BIDDERS IS UNKNOWN (2012)
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