A Proxy Bidding Mechanism that Elicits all Bids in an English Clock Auction Experiment
This paper reconsiders experimental tests of the English clock auction. We point out why the standard procedure can only use a small subset of all bids, which gives rise to a selection bias. We propose an alternative yet equivalent format that makes all bids visible, and apply it to a â€œwallet auctionâ€ experiment. Finally, we test the theory against various alternative hypotheses, and compare the results with those that would have been obtained if one had used the standard procedure. Our results confirm that the standard tests are subject to a significant selection bias.
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- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
- John Kagel & Svetlana Pevnitskaya & Lixin Ye, 2007.
Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 103-119, October.
- Lixin Ye & John Kagel & Svetlana Pevnitska, 2004. "Survival Auctions," Econometric Society 2004 North American Winter Meetings 414, Econometric Society.
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