Experimental internet auctions with random information retrieval
We run an experiment where 97 subjects could retrieve records of completed past auctions before placing their bids in current one-bid, two-bid, and auction-selection games. Each subject was asked to participate in 3 current auctions; but could retrieve up to 60 records of completed (past) auctions. The results reveal a positive relation between the payoffs earned by the subjects and their history-inspection effort. Subjects act as if responding to the average bidding-ratios of the winners in the samples that they have retrieved. They apply intuitive signal-dependent stopping rules like â€œsample until observing a winner-value close to my wonâ€ or â€œfind a close winner-value and try one more historyâ€ when sampling the databases. History-inspection directs bidders with relatively high private-valuations to moderate bidding which increases their realized payoffs. (JEL C9 D4 D8) Copyright Economic Science Association 2006
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