A Proxy Bidding Mechanism that Elicits all Bids in an English Clock Auction Experiment
AbstractThis paper reconsiders experimental tests of the English clock auction. We point out why the standard procedure can only use a small subset of all bids, which gives rise to a selection bias. We propose an alternative yet equivalent format that makes all bids visible, and apply it to a â€œwallet auctionâ€ experiment. Finally, we test the theory against various alternative hypotheses, and compare the results with those that would have been obtained if one had used the standard procedure. Our results confirm that the standard tests are subject to a significant selection bias.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 36.
Date of creation: Feb 2005
Date of revision:
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More information through EDIRC
English Clock Auctions; Experimental Economics;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
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- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- John Kagel & Svetlana Pevnitskaya & Lixin Ye, 2007.
Springer, vol. 33(1), pages 103-119, October.
- Lixin Ye & John Kagel & Svetlana Pevnitska, 2004. "Survival Auctions," Econometric Society 2004 North American Winter Meetings 414, Econometric Society.
- Paul Klemperer, 1997.
"Auctions with Almost Common Values: The Wallet Game and its Applications,"
Economics Series Working Papers
1998-W03, University of Oxford, Department of Economics.
- Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
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