Individuals and Teams in Auctions
University of Innsbruck; University of Gothenburg - Department of Economics; Institute for the Study of Labor (IZA)
Martin G. Kocher
Ludwig-Maximilians-Universität Munich - Faculty of Economics; Göteborg University - School of Business, Economics and Law
University of Munich
Oxford Economic Papers, Vol. 61, No. 2, pp. 380-394, 2009
Experimental studies on bidding in auctions have so far relied on individual bidders, even though teams are often involved in real auctions. We examine the bidding behaviour of individuals and teams. Our experimental results show that teams stay longer in an (ascending sealed-bid English) auction and pay significantly higher prices than individuals. Consequently, teams make smaller profits and suffer more often from the winner's curse. The auction's efficiency is nevertheless higher with teams, since bidders with the highest valuation are more likely to win the auction when teams bid. We relate our findings to the European UMTS-spectrum auctions.
JEL Classification: C91, C92, D44Accepted Paper Series
Date posted: March 27, 2009
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