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The high/low divide: Self-selection by values in auction choice

  • Ivanova-Stenzel, Radosveta
  • Salmon, Timothy C.

Most prior theoretical and experimental work involving auction choice has assumed bidders find out their value after making a choice of which auction to enter. We examine whether or not bidders knowing their value prior to making a choice of which among multiple alternative auction formats to enter impacts their choice decision and/or the outcome of the auctions. The results show a strong impact on auction choice. Subjects with low values choose the first price sealed bid auction more often while subjects with high values choose the ascending auction more often. The number of bidders in each auction, revenue, efficiency and average bidder surplus all end up equalized.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 73 (2011)
Issue (Month): 1 (September)
Pages: 200-214

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Handle: RePEc:eee:gamebe:v:73:y:2011:i:1:p:200-214
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  17. Dan Levin & James L. Smith, 2002. "Entry coordination in auctions and social welfare: An experimental investigation," International Journal of Game Theory, Springer, vol. 30(3), pages 321-350.
  18. Radosveta Ivanova-Stenzel & Timothy C. Salmon, 2008. "Robustness Of Bidder Preferences Among Auction Institutions," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 355-368, 07.
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