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Auction Format and Auction Sequence in Multi-Item Multi-Unit Auctions - An experimental study

Author

Listed:
  • Regina Betz

    () (Australian School of Business, the University of New South Wales)

  • Ben Greiner

    () (School of Economics, Australian School of Business, the University of New South Wales)

  • Sascha Schweitzer

    () (University of Bayreuth)

  • Stefan Seifert

    () (University of Bayreuth)

Abstract

We experimentally study the effect of auction format (sealed-bid vs. closed clock vs. open clock) and auction sequence (simultaneous vs. sequential) on bidding behaviour and auction outcomes in auctions of multiple related multi-unit items. Prominent field applications are the sale of emission permits, fishing rights, and electricity. We find that, when auctioning simultaneously, clock auctions outperform sealed-bid auctions in terms of efficiency and revenues. This advantage disappears when the items are auctioned sequentially. In addition, auctioning sequentially has positive effects on total revenues across all auction formats, resulting from fiercer competition on the item auctioned first.

Suggested Citation

  • Regina Betz & Ben Greiner & Sascha Schweitzer & Stefan Seifert, 2014. "Auction Format and Auction Sequence in Multi-Item Multi-Unit Auctions - An experimental study," Discussion Papers 2014-31, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2014-31
    as

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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2014-31.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    emission permits; auction design; laboratory experiment;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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