A laboratory study of Demand Reduction and Collusion in Uniform- and Discriminatory-Price Auctions
We report results of an experimental study of multi-object uniform and discriminatory-price auctions in an environment of publicly known common values, concentrating on an environment where theory predicts sharply different results of the two auction formats. We find that the bidding behavior in the uniform case exhibits two clear regularities: agents consistently play weakly dominated strategies by overbidding on the first unit and have moderate difficulty coordinating on the high payoff (low auction revenue) equilibrium predicted by theory. However, subjects with experience in the same environment are better at reducing demand to achieve higher payoff. Bidders in discriminatory auctions, as predicted, tend to submit bids close to value for all units and are not generally successful in attempts at collusion.
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- Gautam Goswami & Thomas Noe & Michael Rebello, 1995.
"Collusion in uniform-price auctions: experimental evidence and implications for Treasury auctions,"
95-5, Federal Reserve Bank of Atlanta.
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Papers of Peter Cramton
98wpdr, University of Maryland, Department of Economics - Peter Cramton, revised 22 Jul 2002.
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