An Experimental Study of Information Revelation Policies in Sequential Auctions

Timothy Cason, Karthik N. Kannan and Ralph Siebert

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: Theoretical models of information asymmetry have identi ed a tradeoff between the desire to learn and the desire to prevent an opponent from learning private information. This paper reports a laboratory experiment that investigates if actual bidders account for this tradeoff, using a sequential procurement auction with private cost information and varying information revelation policies. Speci cally, the Complete Information Policy, where all submitted bids are revealed between auctions, is compared against the Incomplete Information Policy, where only the winning bid is revealed. The experimental results are largely consistent with the theoretical predictions. For example, bidders pool with other types to prevent an opponent from learning signi cantly more often under a Complete Information Policy. Also as predicted, the procurer pays less when employing an Incomplete Information Policy only when the market is highly competitive. Bids are usually more aggressive than the risk neutral quantitative prediction, which is usually consistent with risk aversion.

Keywords: Complete and Incomplete Information Revelation Policies; Laboratory Study; Procurement Auction; Multistage Game (search for similar items in EconPapers)
JEL-codes: C91 D44 D82 (search for similar items in EconPapers)
Pages: 43
Date: 2010-06
New Economics Papers: this item is included in nep-cta and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://business.purdue.edu/research/Working-papers-series/2010/1235.pdf (application/pdf)

Related works:
Journal Article: An Experimental Study of Information Revelation Policies in Sequential Auctions (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1235

Access Statistics for this paper

More papers in Purdue University Economics Working Papers from Purdue University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Business PHD ().