Bidding behavior in the bisection auction – an experimental investigation
AbstractWe present a laboratory experiment in which we investigate bidding behavior with independent private values in the recently proposed bisection auction, and compare it with two classical auction formats - the Vickrey auction and the English auction. We test whether subjects behave strategically equivalent, following the dominant truth-telling strategy, as predicted by theory. Furthermore, we provide some insights concerning the learning process, the efficiency of allocation, and the revenue to the auctioneer. Data show that the bisection auction performs better than the Vickrey auction and only in some terms worse than the English auction.
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Bibliographic InfoPaper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 026.
Date of creation: 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-09 (All new papers)
- NEP-CBE-2006-07-09 (Cognitive & Behavioural Economics)
- NEP-LTV-2006-07-09 (Unemployment, Inequality & Poverty)
- NEP-SOC-2006-07-09 (Social Norms & Social Capital)
- NEP-UPT-2006-07-09 (Utility Models & Prospect Theory)
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