Elicited bid functions in (a)symmetric first-price auctions
AbstractWe report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders' complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 578.03.
Date of creation: 04 Jun 2003
Date of revision:
Asymmetric first-price auctions; private independent values; elicited bid functions; constant relative risk aversion; empirical best replies; experimental methods;
Other versions of this item:
- Paul Pezanis-Christou & Abdolkarim Sadrieh, 2003. "Elicited bid functions in (a)symmetric first-price auctions," Working Papers 85, Barcelona Graduate School of Economics.
- Pezanis-Christou, P. & Sadrieh, A., 2003. "Elicited Bid Functions in a (a)Symmetric First-Price Auctions," Discussion Paper 2003-58, Tilburg University, Center for Economic Research.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-04 (All new papers)
- NEP-COM-2004-07-04 (Industrial Competition)
- NEP-EXP-2004-07-04 (Experimental Economics)
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