Demand Reduction In Multi-Unit Auctions With Varying Numbers Of Bidders: Theory And Evidence From A Field Experiment
Recent auction theory and experimental results document strategic demand reduction by bidders in uniform-price auctions. The present article extends this area of research to consider the effects of varying the number of bidders. Our theoretical model predicts that demand reduction should decrease with an increase in the number of bidders. Considerable demand reduction remains even in the asymptotic limit, although truthful bidding yields profits very close to those of equilibrium play. We experimentally confirm several of our predictions by examining bidding behavior of subjects in an actual marketplace, auctioning dozens of sportscards using both uniform-price and Vickrey auction formats. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
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Volume (Year): 47 (2006)
Issue (Month): 1 (02)
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- John List & David Lucking-Reiley, 2000.
"Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment,"
Natural Field Experiments
00520, The Field Experiments Website.
- David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
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- John List & Jason Shogren, 1998.
"Calibration of the difference between actual and hypothetical valuations in a field experiment,"
Natural Field Experiments
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- List, John A. & Shogren, Jason F., 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 193-205, October.
- John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
- Engelbrecht-Wiggans, Richard, 1999. "An example of multi-unit auctions with atypically many equilibria," Economics Letters, Elsevier, vol. 65(1), pages 67-69, October.
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