A novel experimental test of truthful bidding in second-price auctions with real objects

Antonio Rosato and Agnieszka Tymula

MPRA Paper from University Library of Munich, Germany

Abstract: We present experimental evidence on bidding in second-price auctions with real objects. Our novel design, combining a second-price auction with an individual-specific binary choice task based on the outcome of the auction, allows us to directly identify over and under-bidding. We analyze bidding in real-object and induced-value auctions, and find significant deviations from truthful bidding in both. Overall, under-bidding is somewhat more prevalent than over-bidding; yet, the latter has a bigger magnitude, especially with induced values. At the individual level, we find no relation between the tendency to deviate from truthful bidding in induced-value vs. real-object auctions.

Keywords: second-price auctions; overbidding; consumer surplus (search for similar items in EconPapers)
JEL-codes: D44 D81 D91 D92 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-des, nep-exp and nep-gth
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Related works:
Journal Article: A novel experimental test of truthful bidding in second-price auctions with real objects (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:115427

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