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Uniform vs. Discriminatory Auctions with Variable Supply - Experimental Evidence

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  • Damianov, Damian S.

    ()
    (The University of Texas-Pan American)

  • Oechssler, Jörg

    ()
    (Department of Economics, University of Heidelberg)

  • Becker, Johannes Gerd

    ()
    (ETH Zurich, Department of Economics)

Abstract

In the variable supply auction considered here, the seller decides how many costumers with unit demand to serve after observing their bids. Bidders are uncertain about the seller's cost. We experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting. Exactly as predicted by theory, it turns out that the uniform price auction produces substantially higher bids, and consequently yields higher revenues and profits for the seller. Somewhat surprisingly but again predicted by theory, it also yields a higher number of transactions, which makes it the more efficient auction format.

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Bibliographic Info

Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 07-68.

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Length: 31 pages
Date of creation: 05 Dec 2007
Date of revision:
Handle: RePEc:xrs:sfbmaa:07-68

Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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Cited by:
  1. Damian S. Damianov & Johannes Gerd Becker, 2008. "Auctions with Variable Supply: Uniform Price versus Discriminatory," CER-ETH Economics working paper series 08/80, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  2. Steven Tucker & Charles Noussair & Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multiunit Auctions," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 461-490, 07.
  3. Metzger, Lars Peter, 2014. "Invader strategies in the war of attrition with private information," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 160-166.

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