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Allowing options in experimental auctions

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  • Matthew Rousu
  • Katherine Kosa

Abstract

Experimental auctions are a popular method to examine economic issues. However, given a fixed budget, a concern among experimental economists is maximizing the number of usable bids. A new experimental auction method has the potential to increase the number of usable responses. The options in auctions method allows the winning participant(s) to choose the product they most prefer to purchase from multiple products in the auction. The results of the experimental auction show that allowing options in auctions can increase the number of usable bids, especially when products are substitutes.

Suggested Citation

  • Matthew Rousu & Katherine Kosa, 2005. "Allowing options in experimental auctions," Applied Economics Letters, Taylor & Francis Journals, vol. 12(13), pages 817-821.
    • Handle: RePEc:taf:apeclt:v:12:y:2005:i:13:p:817-821
    DOI: 10.1080/13504850500193059
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    References listed on IDEAS

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    1. Chavez, Daniel & Palma, Marco, 2015. "Off the reservation: Pushing the bounds of rationality in experimental auctions," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 202164, Agricultural and Applied Economics Association.

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