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Obviousness Around the Clock

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  • Breitmoser, Yves

    (Bielefeld University)

  • Schweighofer-Kodritsch, Sebastian

    (HU Berlin and WZB Berlin)

Abstract

Li (2017) supports his theoretical notion of obviousness of a dominant strategy with experimental evidence that bidding is closer to dominance in the dynamic ascending-clock than the static second-price auction (private values). We replicate his experimental study and add three intermediate auction formats to decompose this behavioral improvement into cumulative effects of (1) seeing an ascending-price clock (after bid submission), (2) bidding dynamically on the clock and (3) getting drop-out information. Li\'s theory predicts dominance to become obvious through (2) dynamic bidding. We find no significant behavioral effect of (2). However, both (1) and (3) are highly significant.

Suggested Citation

  • Breitmoser, Yves & Schweighofer-Kodritsch, Sebastian, 2019. "Obviousness Around the Clock," Rationality and Competition Discussion Paper Series 151, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:151
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    Cited by:

    1. Marek Pycia & Peter Troyan, 2021. "A theory of simplicity in games and mechanism design," ECON - Working Papers 393, Department of Economics - University of Zurich.
    2. Breitmoser, Yves & Schweighofer-Kodritsch, Sebastian, 2019. "Obviousness around the clock," Discussion Papers, Research Unit: Market Behavior SP II 2019-203, WZB Berlin Social Science Center.
    3. von Wangenheim, Jonas, 2021. "English versus Vickrey auctions with loss-averse bidders," Journal of Economic Theory, Elsevier, vol. 197(C).

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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