Behavior in Second-Price Auctions by Highly Experienced eBay Buyers and Sellers
When second-price auctions have been conducted in the laboratory, most of the observed bids have been â€œoverbidsâ€ (bids that exceed the bidderâ€™s value) and there are very few underbids. Few if any of the subjects in those experiments had any prior experience bidding in auctions. We report on sealed-bid second-price auctions that we conducted on the Internet using subjects with substantial prior experience: they were highly experienced participants in eBay auctions. Unlike the novice bidders in previous (laboratory) experiments, the experienced bidders exhibited no greater tendency to overbid than to underbid. However, even subjects with substantial prior experience tend not to bid their values, suggesting that the non-optimal bidding of novice subjects is robust to substantial experience in non-experimental auctions. A key determinant of bidding behavior was whether a subject had ever been a seller on eBay.
|Date of creation:||29 Mar 2004|
|Date of revision:|
|Contact details of provider:|| Postal: 2127 North Hall, Santa Barbara, CA 93106-9210|
Phone: (805) 893-3670
Fax: (805) 893-8830
Web page: http://www.escholarship.org/repec/ucsbecon_dwp/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Coppinger, Vicki M & Smith, Vernon L & Titus, Jon A, 1980. "Incentives and Behavior in English, Dutch and Sealed-Bid Auctions," Economic Inquiry, Western Economic Association International, vol. 18(1), pages 1-22, January.
- Kagel, J.H. & Levin, D., 1988.
"Independent Private Value Auctions: Bidder Behavior In First, Second And Third-Price Auctions With Varying Numbers Of Bidders,"
13, Houston - Department of Economics.
- Kagel, John H & Levin, Dan, 1993. "Independent Private Value Auctions: Bidder Behaviour in First-, Second- and Third-Price Auctions with Varying Numbers of Bidders," Economic Journal, Royal Economic Society, vol. 103(419), pages 868-79, July.
- Alvin E. Roth & Axel Ockenfels, .
"Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet,"
Papers on Strategic Interaction
2002-32, Max Planck Institute of Economics, Strategic Interaction Group.
- Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
- Ronald Harstad, 2000. "Dominant Strategy Adoption and Bidders' Experience with Pricing Rules," Experimental Economics, Springer;Economic Science Association, vol. 3(3), pages 261-280, December.
- Guth, Werner & Ivanova-Stenzel, Radosveta, 2003.
"Asymmetric auction experiments with(out) commonly known beliefs,"
Elsevier, vol. 80(2), pages 195-199, August.
- Werner Güth & Radosveta Ivanova-Stenzel, . "Asymmetric Auction Experiments With(out) Commonly Known Beliefs," Papers on Strategic Interaction 2002-36, Max Planck Institute of Economics, Strategic Interaction Group.
- John List, 2003.
"Does market experience eliminate market anomalies?,"
Natural Field Experiments
00297, The Field Experiments Website.
- John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 41-71.
- Harstad, Ronald M., 1996. "Dominant Strategy Adoption, Efficiency, and Bidders' Experience with Pricing Rules," Discussion Paper Serie B 357, University of Bonn, Germany.
- Rodney Garratt & Mark Walker & John Wooders, 2012.
"Behavior in second-price auctions by highly experienced eBay buyers and sellers,"
Springer;Economic Science Association, vol. 15(1), pages 44-57, March.
- Garratt, Rod & Walker, Mark & Wooders, John, 2004. "Behavior in Second-Price Auctions by Highly Experienced eBay Buyers and Sellers," University of California at Santa Barbara, Economics Working Paper Series qt7s72r56p, Department of Economics, UC Santa Barbara.
- Kagel, John H & Harstad, Ronald M & Levin, Dan, 1987. "Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study," Econometrica, Econometric Society, vol. 55(6), pages 1275-1304, November.
- Guth, Werner & Ivanova-Stenzel, Radosveta & Wolfstetter, Elmar, 2005.
"Bidding behavior in asymmetric auctions: An experimental study,"
European Economic Review,
Elsevier, vol. 49(7), pages 1891-1913, October.
- Güth, Werner & Ivanova-Stenzel, Radosveta & Wolfstetter, Elmar, 2001. "Bidding behavior in asymmetric auctions: An experimental study," SFB 373 Discussion Papers 2001,15, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Oliver Kirchkamp, & Philipp Reiß, 2006. "Another explanation for overbidding and another bias for underbidding in first-price auctions," CRIEFF Discussion Papers 0606, Centre for Research into Industry, Enterprise, Finance and the Firm.
- David Lucking-Reiley & Charles H. Mullin, 2000.
"Recombinant Estimation for Normal-Form Games, with Applications to Auctions and Bargaining,"
Econometric Society World Congress 2000 Contributed Papers
0077, Econometric Society.
- Mullin, Charles H. & Reiley, David H., 2006. "Recombinant estimation for normal-form games, with applications to auctions and bargaining," Games and Economic Behavior, Elsevier, vol. 54(1), pages 159-182, January.
- David Lucking-Reiley & Charles H. Mullin, 2000. "Recombinant Estimation for Normal-Form Games, with Applications to Auctions and Bargaining," Vanderbilt University Department of Economics Working Papers 0014, Vanderbilt University Department of Economics.
- Werner G¸th & Radosveta Ivanova-Stenzel & Manfred K–nigstein & Martin Strobel, 2003.
"Learning to bid - an experimental study of bid function adjustments in auctions and fair division games,"
Royal Economic Society, vol. 113(487), pages 477-494, 04.
- Güth, Werner & Ivanova, Radosveta & Königstein, Manfred & Strobel, Martin, 1999. "Learning to bid: An experimental study of bid function adjustments in auctions and fair division games," SFB 373 Discussion Papers 1999,70, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- David J. Cooper & John H. Kagel, 2009. "The Role of Context and Team Play in Cross-Game Learning," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 1101-1139, 09.
When requesting a correction, please mention this item's handle: RePEc:cdl:ucsbec:qt7s72r56p. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)
If references are entirely missing, you can add them using this form.