Perfect Equilibria in Budget-Constrained Sequential Auctions: An Experimental Study
AbstractThis article presents an experimental study of bidding behavior in sequential auctions in which there are budget constraints and perfect information. Our experiments test both the properties of such auctions and the predictive power of a refinement of the Nash equilibrium concept. We find that budget constraints affect the behavior of bidders and that the trembling-hand perfect equilibrium is generally a good predictor of prices.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 19 (1988)
Issue (Month): 3 (Autumn)
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Web page: http://www.rje.org
Other versions of this item:
- Pitchik, Carolyn & Schotter, Andrew, 1986. "Perfect Equilibria in Budget Constrained Sequential Auctions: An Experimental Study," Working Papers 86-22, C.V. Starr Center for Applied Economics, New York University.
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- Peter Cramton, 1995.
"Money Out of Thin Air: The Nationwide Narrowband PCS Auction,"
Papers of Peter Cramton
95jems, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
- Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
- Roberto Burguet & R. Preston McAfee, 2008.
"License Prices for Financially Constrained Firms,"
UFAE and IAE Working Papers
745.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Roberto Burguet & Preston McAffee, 2005. "License Prices for Financially Constrained Firms," Working Papers 224, Barcelona Graduate School of Economics.
- Roberto Burguet & R. Preston McAfee, 2008. "License Prices for Financially Constrained Firms," Working Papers 351, Barcelona Graduate School of Economics.
- Yeon-Koo Che & Ian Gale, 1994. "Auctions with budget-constrained buyers: a nonequivalence result," Working Paper 9402, Federal Reserve Bank of Cleveland.
- Ettinger, David, 2010. "Bidding among friends and enemies with symmetric information," Economics Papers from University Paris Dauphine 123456789/5447, Paris Dauphine University.
- Beker, Pablo & Hernando-Veciana, Angel, 2013. "Bidding Markets with Financial Constraints," The Warwick Economics Research Paper Series (TWERPS) 1017, University of Warwick, Department of Economics.
- Schnitzlein, Charles R. & Shao, Minjie, 2013. "Capacity constraints and the winner's curse in multi-unit common value auctions," The Quarterly Review of Economics and Finance, Elsevier, vol. 53(2), pages 188-201.
- Ettinger, David, 2008. "Auctions and shareholdings," Economics Papers from University Paris Dauphine 123456789/5431, Paris Dauphine University.
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