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Auctions with external incentives: experimental evidence

Author

Listed:
  • Miguel A. Fonseca

    (University of Exeter and NIPE, Universidade do Minho)

  • Francesco Giovannoni

    (University of Bristol)

  • Miltiadis Makris

    (University of Kent)

Abstract

We consider auctions where bidders’ valuations are positively correlated with their productivity in a second-stage aftermarket. We test in the lab whether bidders recognize the opportunity to signal their productivity through their bidding and, conditional on them doing so, whether disclosing different information about the auction outcomes affects their signaling behavior. Our results confirm that bidders recognize the signaling opportunities they face and also react to differences in the way their bidding behavior is disclosed, although not always in a way that is consistent with theoretical predictions.

Suggested Citation

  • Miguel A. Fonseca & Francesco Giovannoni & Miltiadis Makris, 2020. "Auctions with external incentives: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 1003-1043, December.
    • Handle: RePEc:spr:jogath:v:49:y:2020:i:4:d:10.1007_s00182-020-00725-1
    DOI: 10.1007/s00182-020-00725-1
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    Cited by:

    1. Bos, Olivier & Gomez-Martinez, Francisco & Onderstal, Sander & Truyts, Tom, 2021. "Signalling in auctions: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 448-469.

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    More about this item

    Keywords

    Auctions; Signaling; Disclosure; Experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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