Information Effects in Multi-Unit Dutch Auctions
AbstractThis study compares bidding behavior in a multi-unit uniform-price descending price (Dutch) auction under four different information conditions. Bidders are either informed of the number of bidders in the auction, or know that it is one of two possible sizes; they also either know the number of units remaining for sale or are unaware of how many units have been taken by other bidders. We find that revealing group size decreases bids, and therefore revenue, if units remaining are not shown. When group size is unknown the price also falls if the number of units remaining is revealed. The most efficient and largest revenue outcome occurs when bidders are not provided information on either group size or units remaining.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 12-08.
Length: 27 pages
Date of creation: 2012
Date of revision:
Experimental Economics; Auctions; Institutions;
Find related papers by JEL classification:
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-23 (All new papers)
- NEP-CTA-2012-04-23 (Contract Theory & Applications)
- NEP-EXP-2012-04-23 (Experimental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Douglas Dyer & John H. Kagel & Dan Levin, 1989. "Resolving Uncertainty about the Number of Bidders in Independent Private-Value Auctions: An Experimental Analysis," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 268-279, Summer.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- McAfee, R. Preston & McMillan, John, 1987. "Auctions with a stochastic number of bidders," Journal of Economic Theory, Elsevier, vol. 43(1), pages 1-19, October.
- Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multi-Unit Auctions," Working Papers 201301, University of Hawaii at Manoa, Department of Economics.
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