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Allotment In First-Price Auctions: An Experimental Investigation

Author

Listed:
  • Luca Corazzini

    () (University of Padova)

  • Stefano Galavotti

    () (University of Padova)

  • Rupert Sausgruber

    (University of Innsbruck)

  • Paola Valbonesi

    () (University of Padova)

Abstract

We experimentally study the effects of allotment Ð the division of an item into several units Ð in independent private value auctions. In particular, we compare a single-item, first-price auction with two equivalent treatments with allotment: a two-unit discriminatory auction and a setting in which subjects participate in two identical and simultaneous first- price auctions, each involving a single unit. We find that allotment mitigates overbidding, with this effect being more pronounced in the discriminatory auction. In the allotment treatments, most bidders submit different bids for identical units (bid spreading). Across treatments, the discriminatory auction is the least efficient.

Suggested Citation

  • Luca Corazzini & Stefano Galavotti & Rupert Sausgruber & Paola Valbonesi, 2012. "Allotment In First-Price Auctions: An Experimental Investigation," "Marco Fanno" Working Papers 0153, Dipartimento di Scienze Economiche "Marco Fanno".
  • Handle: RePEc:pad:wpaper:0153
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    More about this item

    Keywords

    allotment; multi-unit auction; discriminatory auction; first price auction.;

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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