Experimental Evidence on English Auctions: Oral Outcry vs. Clock

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Experimental Evidence on English Auctions: Oral Outcry vs. Clock

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Ricardo Gonçalves
John D Hey

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Abstract

This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an open outcry auction, where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner's curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 07/09.

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Date of creation: May 2007
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Handle: RePEc:yor:yorken:07/09

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-05-19 (All new papers)
NEP-CBE-2007-05-19 (Cognitive & Behavioural Economics)
NEP-EXP-2007-05-19 (Experimental Economics)
NEP-GTH-2007-05-19 (Game Theory)

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Isaac, R. Mark & Salmon, Timothy C. & Zillante, Arthur, 2007. "A theory of jump bidding in ascending auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 144-164, January. [Downloadable!] (restricted)
Other versions:
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Kim, Jinwoo & Che, Yeon-Koo, 2004. "Asymmetric information about rivals' types in standard auctions," Games and Economic Behavior, Elsevier, vol. 46(2), pages 383-397, February. [Downloadable!] (restricted)
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Other versions:
- Colin M. Campbell & John H. Kagel & Dan Levin, 1999. "The Winner's Curse and Public Information in Common Value Auctions: Reply," American Economic Review, American Economic Association, vol. 89(1), pages 325-334, March. [Downloadable!] (restricted)
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Other versions:
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Other versions:
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Other versions:
- Gary Charness & Dan Levin, 2007. "The Origin of the Winner's Curse: A Laboratory Study," University of California at Santa Barbara, Economics Working Paper Series 17-07c, Department of Economics, UC Santa Barbara. [Downloadable!]
- Gary Charness & Dan Levin, 2009. "The Origin of the Winner's Curse: A Laboratory Study," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 207-36, February. [Downloadable!]
Fang, Hanming & Morris, Stephen, 2006. "Multidimensional private value auctions," Journal of Economic Theory, Elsevier, vol. 126(1), pages 1-30, January. [Downloadable!] (restricted)
Other versions:
- Hanming Fang & Stephen Morris, 2003. "Multidimensional Private Value Auctions," Cowles Foundation Discussion Papers 1423, Cowles Foundation, Yale University. [Downloadable!]
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