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Multiple-bidding in auctions as bidders become confident of their private valuations

Author

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  • Christopher Cotton

    () (Department of Economics, Cornell University)

Abstract

A bidder may increase his bid over the course of an auction when (1) he becomes more certain about his private valuation over time (as he has more time to consider using the item), and (2) there is a positive probability he is unable to return to the auction to submit a bid in a later period. Evidence from a classroom experiment supports the theoretical findings.

Suggested Citation

  • Christopher Cotton, 2008. "Multiple-bidding in auctions as bidders become confident of their private valuations," Working Papers 0902, University of Miami, Department of Economics.
  • Handle: RePEc:mia:wpaper:0902
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    File URL: http://www.bus.miami.edu/_assets/files/faculty-and-research/academic-departments/eco/eco-working-papers/wp2009-02-MultipleBidding.pdf
    File Function: First version, 2008
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    References listed on IDEAS

    as
    1. 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.
    2. Bajari, Patrick & Hortacsu, Ali, 2003. " The Winner's Curse, Reserve Prices, and Endogenous Entry: Empirical Insights from eBay Auctions," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 329-355, Summer.
    3. Ockenfels, Axel & Roth, Alvin E., 2006. "Late and multiple bidding in second price Internet auctions: Theory and evidence concerning different rules for ending an auction," Games and Economic Behavior, Elsevier, vol. 55(2), pages 297-320, May.
    4. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    5. Rasmusen Eric Bennett, 2006. "Strategic Implications of Uncertainty over One's Own Private Value in Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-22, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tim Grebe & Radosveta Ivanova-Stenzel & Sabine Kröger, 2009. "Buy-it-Now Prices in eBay Auctions-The Field in the Lab," Cahiers de recherche 0950, CIRPEE.
    2. Christopher Cotton, 2009. "Sniping to Avoid the Endowment E ect in Auctions," Working Papers 2010-13, University of Miami, Department of Economics.
    3. Wenchuan Liu & Yu Zhang & Qi Li, 2015. "A semiparametric varying coefficient model of monotone auction bidding processes," Empirical Economics, Springer, vol. 48(1), pages 313-335, February.

    More about this item

    Keywords

    auction; eBay; multiple bidding; value discovery;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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