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AJAE Appendix: Posted Prices and Bid Affiliation: Evidence from Experimental Auctions

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  • Corrigan, Jay R.
  • Rousu, Matthew C.

Abstract

In most experimental auctions, researchers ask participants to bid on the same item in multiple potentially binding rounds, posting the price submitted by the top bidder or bidders after each of those rounds. If bids submitted in later rounds are affiliated with posted prices from earlier rounds, this practice could result in biased value estimates. In this article, we discuss the results of an experiment designed explicitly to test whether posted prices affect bidding behavior. We find that for familiar items, high posted prices lead to increased bids in subsequent rounds. Our results have implications for researchers conducting experimental auctions. Copyright 2006, Oxford University Press.
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Suggested Citation

  • Corrigan, Jay R. & Rousu, Matthew C., 2006. "AJAE Appendix: Posted Prices and Bid Affiliation: Evidence from Experimental Auctions," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 88(4), pages 1-12, November.
  • Handle: RePEc:ags:ajaeap:7395
    DOI: 10.22004/ag.econ.7395
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    Keywords

    Demand and Price Analysis;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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