Bidders' Choice Auctions: Raising Revenues Through the Right to Choose
AbstractSales of multiple real-estate properties are often conducted via a sequence of ascending auctions, giving the winner at each stage the right to choose one of the available lots. We show that when bidders are risk averse, such "bidders' choice" auctions raise more revenues than standard simultaneous or sequential ascending auctions. We also report the results of laboratory experiments to investigate the effectiveness of bidders' choice auctions vis-a-vis the simultaneous ascending auction. The revenue-superiority of the bidders' choice auction is corroborated by the experimental data. Finally, we compare observed bidding behavior in the experiments with theoretically predicted bids to estimate a common risk aversion parameter from the data. (JEL: D44, C72) Copyright (c) 2004 The European Economic Association.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 2 (2004)
Issue (Month): 2-3 (04/05)
Contact details of provider:
Web page: http://www.mitpressjournals.org/jeea
Other versions of this item:
- Goeree, Jacob & Plott, Charles & Wooders, John, 2003. "Bidders' choice auctions: Raising revenues through the right to choose," Working Papers 1181, California Institute of Technology, Division of the Humanities and Social Sciences.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Burguet, Roberto, 2007.
"Right to choose in oral auctions,"
Elsevier, vol. 95(2), pages 167-173, May.
- Alevy, Jonathan E. & Cristi, Oscar & Melo, Oscar, 2010.
"Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile,"
Agricultural and Resource Economics Review,
Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
- Jonathan Alevy & Oscar Cristi & Oscar Melo, 2010. "Right-to-choose auctions: A field study of water markets in the limari valley of chile," Framed Field Experiments 00117, The Field Experiments Website.
- Jonathan E. Alevy & Oscar Cristi & Oscar Melo, 2010. "Right-to-Choose Auctions: A Field Study of Water Markets in the Limari Valley of Chile," Working Papers 2010-04, University of Alaska Anchorage, Department of Economics.
- Salmon, Timothy C. & Iachini, Michael, 2007. "Continuous ascending vs. pooled multiple unit auctions," Games and Economic Behavior, Elsevier, vol. 61(1), pages 67-85, October.
- Maarten C.W. Janssen & Vladimir A. Karamychev & Emiel Maasland, 2008. "Simultaneous Pooled Auctions with Multiple Bids and Preference Lists," Tinbergen Institute Discussion Papers 08-034/1, Tinbergen Institute.
- Maarten C.W. Janssen & Vladimir A. Karamychev & Emiel Maasland, 2008.
"Simultaneous Pooled Auctions with Multiple Bids and Preference Lists,"
Tinbergen Institute Discussion Papers
08-034/1, Tinbergen Institute.
- Maarten C. W. Janssen & Vladimir A. Karamychev & Emiel Maasland, 2010. "Simultaneous Pooled Auctions with Multiple Bids and Preference Lists," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(2), pages 286-298, June.
- Eliaz, Kfir & Offerman, Theo & Schotter, Andrew, 2008. "Creating competition out of thin air: An experimental study of right-to-choose auctions," Games and Economic Behavior, Elsevier, vol. 62(2), pages 383-416, March.
- Ronald M. Harstad, 2009.
"Does a Seller Really Want Another Bidder?,"
0909, Department of Economics, University of Missouri.
- Timothy Salmon & Bart Wilson, 2008. "Second chance offers versus sequential auctions: theory and behavior," Economic Theory, Springer, vol. 34(1), pages 47-67, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.