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Individuals and teams in UMTS-license auctions

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Author Info
Matthias Sutter ()
Martin Kocher ()
Sabine Strauß

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Abstract

We examine bidding behaviour of individuals and teams in an experimental auction resembling UMTS-license auctions. Even though in reality teams were largely involved in those auctions, experimental studies on bidding in auctions have so far relied on individual bidders. Our results show that teams stay on average longer in an (ascending sealed-bid English) auction and pay significantly higher prices than individuals. Consequently, teams make smaller profits and suffer more often the winner’s curse. The auction’s efficiency is nevertheless higher with teams, since the bidders with the highest valuation are more likely to win the auction when teams bid.

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Publisher Info
Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2007-23.

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Handle: RePEc:inn:wpaper:2007-23

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Related research
Keywords: UMTS auction; team decision-making; experiment; winner’s curse.;

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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions

References listed on IDEAS
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.:

  1. Martin G. Kocher & Matthias Sutter, 2004. "The Decision Maker Matters: Individual versus Group Behaviour in Experimental Beauty-Contest Games," Papers on Strategic Interaction 2004-09, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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  2. Kocher, Martin & Strau[ss], Sabine & Sutter, Matthias, 2006. "Individual or team decision-making--Causes and consequences of self-selection," Games and Economic Behavior, Elsevier, vol. 56(2), pages 259-270, August. [Downloadable!] (restricted)
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  3. Tilman Börgers & Christian Dustmann, 2005. "Strange Bids: Bidding Behaviour in the United Kingdom's Third Generation Spectrum Auction," Economic Journal, Royal Economic Society, vol. 115(505), pages 551-578, 07. [Downloadable!] (restricted)
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  4. Wolfgang Luhan & Martin Kocher & Matthias Sutter, 2007. "Group polarization in the team dictator game reconsidered," Working Papers 2007-12, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
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  5. Stefan Seifert & Karl-Martin Ehrhart, 2005. "Design of the 3G Spectrum Auctions in the UK and Germany: An Experimental Investigation," German Economic Review, Blackwell Publishing, vol. 6(2), pages 229-248, 05. [Downloadable!] (restricted)
  6. Abbink, Klaus & Irlenbusch, Bernd & Pezanis-Christou, Paul & Rockenbach, Bettina & Sadrieh, Abdolkarim & Selten, Reinhard, 2005. "An experimental test of design alternatives for the British 3G/UMTS auction," European Economic Review, Elsevier, vol. 49(2), pages 505-530, February. [Downloadable!] (restricted)
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  7. Gary Bornstein, 2002. "Intergroup conflict: Individual, group and collective interests," Discussion Paper Series dp297, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem. [Downloadable!]
  8. Matthias Sutter, 2004. "Are four heads better than two? An experimental beauty-contest game with teams of different size," Papers on Strategic Interaction 2004-15, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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  9. Cason, Timothy N & Mui, Vai-Lam, 1997. "A Laboratory Study of Group Polarisation in the Team Dictator Game," Economic Journal, Royal Economic Society, vol. 107(444), pages 1465-83, September. [Downloadable!] (restricted)
  10. Gary Bornstein & Tamar Kugler & Anthony Ziegelmeyer, 2002. "Individual and Group Decisions in the Centipede Game: Are Groups More “Rational” Players?," Discussion Paper Series dp298, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem. [Downloadable!]
  11. Jacob K. Goeree & Theo Offerman, 2003. "Competitive Bidding in Auctions with Private and Common Values," Economic Journal, Royal Economic Society, vol. 113(489), pages 598-613, 07. [Downloadable!] (restricted)
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  12. Blinder, Alan S & Morgan, John, 2005. "Are Two Heads Better than One? Monetary Policy by Committee," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(5), pages 789-811, October.
  13. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June. [Downloadable!]
  14. Gary Bornstein & Ilan Yaniv, 1998. "Individual and Group Behavior in the Ultimatum Game: Are Groups More “Rational†Players?," Experimental Economics, Springer, vol. 1(1), pages 101-108, June. [Downloadable!] (restricted)
  15. Boergers, Tilman & Dustmann, Christian, 2002. "Rationalizing the UMTS Spectrum Bids: the Case of the UK Auction," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  16. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter. [Downloadable!] (restricted)
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  17. James Cox & Stephen Hayne, 2006. "Barking up the right tree: Are small groups rational agents?," Experimental Economics, Springer, vol. 9(3), pages 209-222, September. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. David Masclet & Youenn Loheac & Laurent Denant-Boemont & Nathalie Colombier, 2004. "Group and individual risk preferences : a lottery-choice experiment," Cahiers de la Maison des Sciences Economiques bla06063, Université Panthéon-Sorbonne (Paris 1), revised Sep 2006. [Downloadable!]
    Other versions:
  2. Martin Kocher & Matthias Sutter, 2007. "Individual versus group behavior and the role of the decision making procedure in gift-exchange experiments," Empirica, Springer, vol. 34(1), pages 63-88, March. [Downloadable!] (restricted)
    Other versions:
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