Experimental Evidence on English Auctions: Oral Outcry Versus Clock
affiliation not provided to SSRN
John D. Hey
University of York (UK); Università degli Studi di Bari “Aldo Moro” - Facolta' di Economia
Bulletin of Economic Research, Vol. 63, Issue 4, pp. 313-352, 2011
This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner's curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.
Number of Pages in PDF File: 40
Keywords: discrete bidding, English auctions, winner's curse
JEL Classification: C50, C91, D44Accepted Paper Series
Date posted: September 29, 2011
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