Understanding Overbidding In Second Price Auctions: An Experimental Study
We present results from second price private value auction (SPA) experiments where bidders may receive noisy signals about their opponents' value. Such signals change bidders' perception about the 'strength' of their opponent, and the relationship between bidders' perception of their opponent and overbidding provides a novel channel to understand overbidding in SPA. We found that small and medium overbids are more likely to occur when bidders perceive their rivals to have similar values, supporting a modified 'joy of winning' hypothesis but large overbids are more likely to occur when bidders believe their opponents to have much higher values, consistent with the 'spite' hypothesis. Copyright � The Author(s). Journal compilation � Royal Economic Society 2008.
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Volume (Year): 118 (2008)
Issue (Month): 532 (October)
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- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2005.
"Asymmetric Information about Rivals’ Types in Standard Auctions: An Experiment,"
666156000000000474, UCLA Department of Economics.
- Andreoni, James & Che, Yeon-Koo & Kim, Jinwoo, 2007. "Asymmetric information about rivals' types in standard auctions: An experiment," Games and Economic Behavior, Elsevier, vol. 59(2), pages 240-259, May.
- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2006. "Asymmetric information about rivals' types in standard auctions: An experiment," Discussion Papers 0506-27, Columbia University, Department of Economics.
- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2006. "Asymmetric Information about Rivals’ Types in Standard Auctions: An Experiment," Levine's Bibliography 321307000000000293, UCLA Department of Economics.
- Andreoni,J. & Che,Y.-K. & Kim,J., 2006. "Asymmetric information about rivals' types in standard auctions : an experiment," Working papers 6, Wisconsin Madison - Social Systems.
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