Premium Auctions in the Field

Sander Onderstal

No 17-024/VII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In a field experiment, we study the revenue-generating properties of premium auctions. In a premium auction, the runner-up obtains a premium for driving up the price paid by the winner. Previous research, both theoretical and in the lab, has shown that the relative performance of premium auctions compared to standard auction formats is context-specific. In the experiment, we compare two types of premium auctions with the standard Vickrey auction selling high-quality, limited-edition posters in an online auction. We observe that neither premium auction raises higher revenue than the Vickrey auction. The variance of the revenue in the Amsterdam auction, one of the premium auctions, is lower than that in the Vickrey auction.

Keywords: Premium auctions; field experiment (search for similar items in EconPapers)
JEL-codes: C93 D44 (search for similar items in EconPapers)
Date: 2017-02-20
New Economics Papers: this item is included in nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Premium auctions in the field (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20170024

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