The chopstick auction

Florian Englmaier, Pablo Guillen, Loretoe Llorente, Sander Onderstal and Rupert Sausgruber

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the "chopstick auction" in which bidders are confronted with the exposure problem. We do so both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is less efficient than the second-price sealed-bid auction and that it yields more the same revenue if bidders are inexperienced experienced. © 2008 Elsevier B.V. All rights reserved.

Keywords: Costs; Experiments; Game theory; Industrial economics; Programming theory; Chopstick auction; Exposure problem; Laboratory experiment; Multi-unit auctions; Second-price sealed-bid auction; Simple games; Commerce (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

Published in International Journal of Industrial Organization 2 27(2009): pp. 286-291

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Related works:
Working Paper: The Chopstick Auction (2002)
Working Paper: The Chopstick Auction (2002)
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