Discrete Clock Auctions: An Experimental Study
Peter Cramton (),
Emel Filiz-Ozbay (),
Erkut Ozbay () and
Authors registered in the RePEc Author Service: Emel Filiz Ozbay
Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton
We analyze the implications of different pricing rules in discrete clock auctions. The two most common pricing rules are highest-rejected bid (HRB) and lowest-accepted bid (LAB). Under HRB, the winners pay the lowest price that clears the market; under LAB, the winners pay the highest price that clears the market. Both the HRB and LAB auctions maximize revenues and are fully efficient in our setting. Our experimental results indicate that the LAB auction achieves higher revenues. This also is the case in a version of the clock auction with provisional winners. This revenue result may explain the frequent use of LAB pricing. On the other hand, HRB is successful in eliciting true values of the bidders both theoretically and experimentally.
Keywords: Auctions; clock auctions; spectrum auctions; experimental economics; behavioral economics; market design (search for similar items in EconPapers)
JEL-codes: D44 C92 C78 L96 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010, Revised 2010
New Economics Papers: this item is included in nep-exp
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Published in Working Paper, University of Maryland, June 2010
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Journal Article: Discrete clock auctions: an experimental study (2012)
Working Paper: Discrete Clock Auctions: An Experimental Study (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pcc:pccumd:10dca
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