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Individuals and teams in auctions

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  • Matthias Sutter
  • Martin G. Kocher
  • Sabine Strauss

Abstract

Experimental studies on bidding in auctions have so far relied on individual bidders, even though teams are often involved in real auctions. We examine the bidding behaviour of individuals and teams. Our experimental results show that teams stay longer in an (ascending sealed-bid English) auction and pay significantly higher prices than individuals. Consequently, teams make smaller profits and suffer more often from the winner's curse. The auction's efficiency is nevertheless higher with teams, since bidders with the highest valuation are more likely to win the auction when teams bid. We relate our findings to the European UMTS-spectrum auctions. Copyright 2009 , Oxford University Press.

Suggested Citation

  • Matthias Sutter & Martin G. Kocher & Sabine Strauss, 2009. "Individuals and teams in auctions," Oxford Economic Papers, Oxford University Press, vol. 61(2), pages 380-394, April.
  • Handle: RePEc:oup:oxecpp:v:61:y:2009:i:2:p:380-394
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    Cited by:

    1. Klemens Keldenich, 2012. "Group Membership and Communication in Modified Dictator Games," Ruhr Economic Papers 0322, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. Gillet, Joris & Schram, Arthur & Sonnemans, Joep, 2011. "Cartel formation and pricing: The effect of managerial decision-making rules," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 126-133, January.
    3. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals?," Post-Print halshs-01077253, HAL.
    4. Roman Sheremeta & Jingjing Zhang, 2010. "Can groups solve the problem of over-bidding in contests?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 35(2), pages 175-197, July.
    5. Keldenich, Klemens, 2012. "Group Membership and Communication in Modified Dictator Games," Ruhr Economic Papers 322, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Morone, Andrea & Nuzzo, Simone & Caferra, Rocco, 2016. "The Dollar Auction Game: A laboratory comparison between Individuals and Groups," MPRA Paper 72608, University Library of Munich, Germany.
    7. Ahn, T.K. & Isaac, R. Mark & Salmon, Timothy C., 2011. "Rent seeking in groups," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 116-125, January.
    8. Marco Casari & Jingjing Zhang & Christine Jackson, 2016. "Same process, different outcomes: group performance in an acquiring a company experiment," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 764-791, December.
    9. Morone, Andrea & Morone, Piergiuseppe, 2012. "Are small groups expected utility?," MPRA Paper 38198, University Library of Munich, Germany.
    10. Müller, Wieland & Tan, Fangfang, 2013. "Who acts more like a game theorist? Group and individual play in a sequential market game and the effect of the time horizon," Games and Economic Behavior, Elsevier, vol. 82(C), pages 658-674.
    11. Besedes, Tibor & Deck, Cary & Quintanar, Sarah & Sarangi, Sudipta & Shor, Mikhael, 2011. "Free-Riding and Performance in Collaborative and Non-Collaborative Groups," MPRA Paper 33948, University Library of Munich, Germany.
    12. Bell, William Paul, 2009. "Adaptive interactive expectations: dynamically modelling profit expectations," MPRA Paper 38260, University Library of Munich, Germany, revised 09 Feb 2010.
    13. Gillet, Joris & Schram, Arthur & Sonnemans, Joep, 2009. "The tragedy of the commons revisited: The importance of group decision-making," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 785-797, June.
    14. Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multiunit Auctions," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 461-490, July.
    15. Masclet, David & Colombier, Nathalie & Denant-Boemont, Laurent & Lohéac, Youenn, 2009. "Group and individual risk preferences: A lottery-choice experiment with self-employed and salaried workers," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 470-484, June.
    16. He, Haoran & Villeval, Marie Claire, 2017. "Are group members less inequality averse than individual decision makers?," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 111-124.
    17. Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
    18. Axel Franzen & Sonja Pointner, 2013. "Giving according to preferences: Decision-making in the group dictator game," University of Bern Social Sciences Working Papers 2, University of Bern, Department of Social Sciences, revised 24 Jan 2014.
    19. Haoran He & Marie Claire Villeval, 2014. "Are team members less inequality averse than individual decision makers?," Working Papers halshs-00996545, HAL.
    20. Casari, Marco & Zhang, Jingjing & Jackson, Christine, 2015. "Same Process, Different Outcomes: Group Performance in an Acquiring a Company Experiment," IZA Discussion Papers 9614, Institute for the Study of Labor (IZA).
    21. repec:zbw:rwirep:0322 is not listed on IDEAS
    22. John A. List & Michael K. Price (ed.), 2013. "Handbook on Experimental Economics and the Environment," Books, Edward Elgar Publishing, number 12964, April.
    23. Stephan Kroll & John A. List & Charles F. Mason, 2013. "The prisoner’s dilemma as intergroup game: an experimental investigation," Chapters,in: Handbook on Experimental Economics and the Environment, chapter 16, pages 458-481 Edward Elgar Publishing.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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