Posted Prices and Bid Affiliation: Evidence from Experimental Auctions

13 Pages Posted: 24 Apr 2020

See all articles by Jay R. Corrigan

Jay R. Corrigan

Kenyon College - Department of Economics

Matthew C. Rousu

Susquehanna University

Multiple version iconThere are 2 versions of this paper

Date Written: November 2006

Abstract

In most experimental auctions, researchers ask participants to bid on the same item in multiple potentially binding rounds, posting the price submitted by the top bidder or bidders after each of those rounds. If bids submitted in later rounds are affiliated with posted prices from earlier rounds, this practice could result in biased value estimates. In this article, we discuss the results of an experiment designed explicitly to test whether posted prices affect bidding behavior. We find that for familiar items, high posted prices lead to increased bids in subsequent rounds. Our results have implications for researchers conducting experimental auctions.

Keywords: affiliation, experimental auctions, posted prices

Suggested Citation

Corrigan, Jay R. and Rousu, Matthew C., Posted Prices and Bid Affiliation: Evidence from Experimental Auctions (November 2006). American Journal of Agricultural Economics, Vol. 88, Issue 4, pp. 1078-1090, 2006, Available at SSRN: https://ssrn.com/abstract=3582935 or http://dx.doi.org/10.1111/j.1467-8276.2006.00917.x

Jay R. Corrigan (Contact Author)

Kenyon College - Department of Economics ( email )

Gambier, OH 43022
United States
740-427-5281 (Phone)
740-427-5276 (Fax)

Matthew C. Rousu

Susquehanna University

Selinsgrove, PA 17870
United States

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