Auction Format and Auction Sequence in Multi-Item Multi-Unit Auctions -- An Experimental Study

37 Pages Posted: 1 Jul 2014

See all articles by Regina Betz

Regina Betz

Zurich University of Applied Sciences

Ben Greiner

Vienna University of Economics and Business

Sascha Schweitzer

University of Bayreuth

Stefan Seifert

University of Bayreuth

Date Written: June 23, 2014

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.

Keywords: emission permits, auction design, laboratory experiment

JEL Classification: C90, D44, Q53

Suggested Citation

Betz, Regina and Greiner, Ben and Schweitzer, Sascha and Seifert, Stefan, Auction Format and Auction Sequence in Multi-Item Multi-Unit Auctions -- An Experimental Study (June 23, 2014). UNSW Australian School of Business Research Paper No. 2014-31. Available at SSRN: https://ssrn.com/abstract=2458238 or http://dx.doi.org/10.2139/ssrn.2458238

Regina Betz

Zurich University of Applied Sciences ( email )

Centre for Energy and the Environment (CEE)
Bahnhofplatz 12
Winterthur, CH 8401
Switzerland

Ben Greiner (Contact Author)

Vienna University of Economics and Business

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Sascha Schweitzer

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

Stefan Seifert

University of Bayreuth ( email )

Universitatsstr 30
Bayreuth, D-95447
Germany

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