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Just a small delay? Bidding Behavior and Efficiency in overlapping multiple auctions

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  • Tim Hoppe

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

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    Abstract

    Online auction platforms like eBay provide a wide range of auctions containing substitutable goods. Some of these auctions exhibit parallel elements which means that two or more auctions run side by side for a certain time. Experiments have shown that multiple auctions ending at the same time, result in significantly lower efficiency due to the coordination failure of the buyers. I introduce an experimental setup with three sellers and four buyers in an overlapping multiple second price auction environment, where every seller runs one auction with a homogeneous good and the buyers are confronted with single unit demand. Furthermore, I vary the degree of the overlap between the successive auctions. One main result is that sellers revenue is significantly higher in overlapping multiple auctions than in parallel multiple auctions. Moreover, I observe a lower coordination failure of the buyers in overlapping auctions than in parallel multiple auctions. Due to these results, efficiency in overlapping multiple auctions is higher compared to the efficiency in parallel multiple auctions.

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    File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2008_Dateien/2008_32.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 08032.

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    Length: 28 pages
    Date of creation: Dec 2008
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    Handle: RePEc:mag:wpaper:08032

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    Keywords: internet auctions; cross bidding; market design; electronic business;

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