Divisible-good uniform price auctions: the role of allocation rules and communication among bidders
AbstractWe use laboratory experiments to compare allocation rules in uniform price divisible good auctions. “Standard” and “uniform” allocation rules admit different types of low-price equilibria, which are eliminated by a “hybrid” rule. We observe little evidence of revenue differences among the allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate, and collusive when bidders can explicitly communicate. With explicit communication we find that collusive agreements are more fragile when the gain from a unilateral deviation is larger. We also find that the standard allocation rule is particularly vulnerable to collusive equilibria.
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Bibliographic InfoPaper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2009-21.
Date of creation: Nov 2009
Date of revision:
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experiment; uniform price auction; multi-unit auction; divisible-good auction; allocation rule; communication;
Other versions of this item:
- Martin Sefton & Ping Zhang, 2009. "Divisible-good uniform price auctions: the role of allocation rules and communication among bidders," Discussion Papers 2009-21, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
- NEP-EXP-2009-12-19 (Experimental Economics)
- NEP-GTH-2009-12-19 (Game Theory)
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