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Experimental Evidence On English Auctions: Oral Outcry Versus Clock

In: Experiments in Economics Decision Making and Markets

Author

Listed:
  • Ricardo Gonçalves
  • John Hey

Abstract

This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner’s curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.

Suggested Citation

  • Ricardo Gonçalves & John Hey, 2018. "Experimental Evidence On English Auctions: Oral Outcry Versus Clock," World Scientific Book Chapters,in: Experiments in Economics Decision Making and Markets, chapter 20, pages 427-466 World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789813235816_0020
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    Cited by:

    1. Gonçalves, Ricardo & Ray, Indrajit, 2017. "Partition Equilibria in a Japanese-English Auction with Discrete Bid Levels for the Wallet Game," CRETA Online Discussion Paper Series 34, Centre for Research in Economic Theory and its Applications CRETA.
    2. repec:eee:ecolet:v:159:y:2017:i:c:p:177-179 is not listed on IDEAS
    3. Ingebretsen Carlson, Jim & Wu, Tingting, 2018. "Shill Bidding and Information in Sequential Auctions: A Laboratory Study," Working Papers 2018:18, Lund University, Department of Economics.
    4. Gonçalves, Ricardo & Ray, Indrajit, 2016. "Equilibria in a Japanese-English Auction with Discrete Bid Levels for the Wallet Game," Cardiff Economics Working Papers E2016/13, Cardiff University, Cardiff Business School, Economics Section.

    More about this item

    Keywords

    Experimental Economics; Risk; Ambiguity; Markets; Auctions; Bargaining; Econometrics; Methodology;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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