Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study

Tommy Andersson, Christer Andersson and Ola Andersson
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Christer Andersson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

No 2010:17, Working Papers from Lund University, Department of Economics

Abstract: This paper considers the sealed bid and ascending auction, which both identifies the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theoretical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.

Keywords: Auctions; Non-manipulability; Efficiency; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D44 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2010-12-17
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Andersson, Tommy, Christer Andersson and Ola Andersson, 'Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study' in Review of Economic Design, 2013, pages 1-16.
Published as the book Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study, 2013, Review of Economic Design.

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http://project.nek.lu.se/publications/workpap/papers/WP10_17.pdf (application/pdf)

Related works:
Working Paper: Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2010_017

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