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An Experimental Analysis of Parallel Multiple Auctions

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  • Tim Hoppe

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    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

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    Abstract

    At online auction platforms we often observed that substitutable goods are auctioned concurrently with auctions ending at the same time. I introduce an experimental setup of three sellers and four buyers in an ascending second price auction environment where every seller runs one auction with a homogeneous good and the buyers are confronted with single unit demand. I find that sellers revenue is significantly lower than theory predicts due to the fact that some auctions did not receive bids whereas other auctions concentrated the bids of all bidders. Moreover, I observe a statistically higher revenue of sellers setting the minimum starting price. Furthermore, my study shows that the buyers submit bids which are significantly lower than the private valuation every buyer receives. Comparing the efficiency of the parallel multiple auction setup to a double auction control experiment, I find a significant lower efficiency in parallel multiple auctions due to the coordination failure of the buyers.

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    File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2008_Dateien/2008_31.pdf
    File Function: First version, 2008
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    Bibliographic Info

    Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 08031.

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    Length: 26 pages
    Date of creation: Nov 2008
    Date of revision:
    Handle: RePEc:mag:wpaper:08031

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    Related research

    Keywords: simultaneous auctions; internet auctions; market design; electronic business;

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    Cited by:
    1. Tsuchihashi, Toshihiro, 2012. "Sequential Internet auctions with different ending rules," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 583-598.

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