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Uniform-Price Auctions without Exogenous Uncertainty: An experimental study

Author

Listed:
  • Alexander Elbittar

    (Division of Economics, CIDE)

  • Andrei Gomberg

Abstract

This paper reports results of an experimental study of uniform multi-unit auctions in an environment of publicly known common values. We find that the bidding behavior exhibits two clear regularities: agents consistently play weakly dominated strategies by overbidding on the first unit and have difficulty coordinating on high payoff (low auction revenue) equilibria. In addition, the nature of prior experience seems to have a crucial impact on behavior: subjects with experience in single-unit second-price auctions do not overbid, while subjects with experience in multi-unit uniform-price auctions are better at reducing demand to achieve higher payoff.

Suggested Citation

  • Alexander Elbittar & Andrei Gomberg, 2007. "Uniform-Price Auctions without Exogenous Uncertainty: An experimental study," Working papers DTE 404, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte404
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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE404.pdf
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    References listed on IDEAS

    as
    1. Richard Engelbrecht-Wiggans & John A. List & David H. Reiley, 2006. "Demand Reduction In Multi-Unit Auctions With Varying Numbers Of Bidders: Theory And Evidence From A Field Experiment ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 203-231, February.
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    6. 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 868-879, July.
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    More about this item

    Keywords

    Uniform-Price Auctions; Exogenous Uncertainty; experimental study;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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