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Sealed bid auctions versus ascending bid auctions: an experimental study

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  • Christer Andersson
  • Ola Andersson
  • Tommy Andersson

Abstract

This paper considers two multi-item auction formats (ascending and sealed bid) which both identify the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theoretical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of the investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency. Copyright Springer-Verlag 2013

Suggested Citation

  • Christer Andersson & Ola Andersson & Tommy Andersson, 2013. "Sealed bid auctions versus ascending bid auctions: an experimental study," Review of Economic Design, Springer;Society for Economic Design, vol. 17(1), pages 1-16, March.
    • Handle: RePEc:spr:reecde:v:17:y:2013:i:1:p:1-16
    DOI: 10.1007/s10058-012-0129-3
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    More about this item

    Keywords

    Auctions; Non-manipulability; Efficiency; Experiments; C91; D44;
    All these keywords.

    JEL classification:

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

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