Impact of Valuation Ranking Information on Bidding in First-Price
Alexander Elbittar ()
Microeconomics from University Library of Munich, Germany
Landberger et al. (2001) identified optimal bidder behavior in first- price private-value auctions when the ranking of valuations is common knowledge, and derived comparative-statics predictions regarding the auctioneer’s expected revenue and the efficiency of the allocation. The experiment reported here tests the behavioral components of these comparative-statics predictions. The results support the prediction that buyers are inclined to bid more aggressively when they learn they have the low value. Contrary to the theory, buyers are inclined to bid less when they learn they have the high value. Consistent with theory, the overall proportion of efficient allocations is lower than in the first- price auction before information is revealed. But as a result of high- value bidders decreasing their bids, the expected revenue does not increase on a regular basis, contrary to the theory’s predictions.
Keywords: Asymmetric auctions; laboratory experiments; affiliation and economics of information (search for similar items in EconPapers)
JEL-codes: C92 D44 D82 (search for similar items in EconPapers)
Pages: 33 pages
Note: Type of Document - pdf; prepared on Win98; pages: 33
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpmi:0508008
Access Statistics for this paper
More papers in Microeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().