With this study, we contribute to the literature of auction design by presenting a new auction format: the Candle auction, a popular auction in the Middle Ages. Considering a common value framework, we theoretically and experimentally point out that the Candle auction, where bidding is allowed until a stochastic deadline, yields a better outcome to the seller than the Hard Close auction, the popular eBay online auction format.
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Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number
09019.
Find related papers by JEL classification: C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games C9 - Mathematical and Quantitative Methods - - Design of Experiments D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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