Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study

16 Pages Posted: 26 Sep 2011

See all articles by Christer Andersson

Christer Andersson

Lund University

Ola Andersson

Research Institute of Industrial Economics (IFN); Uppsala University - Department of Economics

Tommy Andersson

Lund University - Department of Economics

Date Written: September 25, 2011

Abstract

This paper considers the sealed bid and ascending auction, which both identifies the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theortical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.

Keywords: Auctions, non-manipulability, efficiency, experiments

JEL Classification: C91, D44

Suggested Citation

Andersson, Christer and Andersson, Ola and Andersson, Ola and Andersson, Tommy, Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study (September 25, 2011). IFN Working Paper No. 882, Available at SSRN: https://ssrn.com/abstract=1933471 or http://dx.doi.org/10.2139/ssrn.1933471

Christer Andersson

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Ola Andersson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
+46 (0)8-665 45 21 (Phone)
+46 8-665 45 99 (Fax)

HOME PAGE: http://www.ifn.se/medarbetare/forskare/ola-andersson

Uppsala University - Department of Economics ( email )

Box 513
Uppsala, 751 20
Sweden

Tommy Andersson

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden

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