Signaling in Auctions: Experimental Evidence

Tinbergen Institute Discussion Paper 17-053/VII

31 Pages Posted: 29 Jun 2017

See all articles by Olivier Bos

Olivier Bos

Université Paris II - Panthéon-Assas

Francisco Gomez-Martinez

Universidad Carlos III Madrid

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Tom Truyts

KU Leuven - Faculty of Business and Economics (FEB); Facultés Universitaires Saint Louis à Bruxelles; Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Multiple version iconThere are 2 versions of this paper

Date Written: June 13, 2017

Abstract

We study the relative performance of the first-price sealed-bid auction and the second-price sealed-bid auction in a laboratory experiment where bidders can signal information through their bidding behavior to an outside observer. We consider two different information settings: the auctioneer reveals either the identity of the winning bidder only, or she also reveals the winner’s payment to an outside observer. We find that the first-price sealed-bid auction in which the winner’s payment is revealed outperforms the other mechanisms in terms of revenue and efficiency. Our findings may have implications for the design of charity auctions, art auctions, and spectrum auctions.

Keywords: Auctions, Signaling, Experiments

JEL Classification: C92, D44, D82

Suggested Citation

Bos, Olivier and Gomez-Martinez, Francisco and Onderstal, Sander and Truyts, Tom, Signaling in Auctions: Experimental Evidence (June 13, 2017). Tinbergen Institute Discussion Paper 17-053/VII, Available at SSRN: https://ssrn.com/abstract=2993874 or http://dx.doi.org/10.2139/ssrn.2993874

Olivier Bos (Contact Author)

Université Paris II - Panthéon-Assas ( email )

12 place du Pantheon
Paris cedex 06, 75231
France

Francisco Gomez-Martinez

Universidad Carlos III Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain
+34694481107 (Phone)

HOME PAGE: http://www.eco.uc3m.es/personal/fragomez/

Sander Onderstal

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Tom Truyts

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Facultés Universitaires Saint Louis à Bruxelles ( email )

Boulevard du Jardin Botanique 43
Bruxelles, 1000
Belgium

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
19
Abstract Views
265
PlumX Metrics