Asymmetry in Divisible Good Auctions: An Experimental Investigation

40 Pages Posted: 24 Jan 2005

See all articles by Orly Sade

Orly Sade

Hebrew University of Jerusalem - Department of Finance

Charles R. Schnitzlein

School of Business, University of Vermont

Jaime F. Zender

University of Colorado at Boulder - Department of Finance

Abstract

We show that asymmetry in bidders' capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit discriminatory and uniform-price auctions. This effect seems to be related to the increased difficulty of coordination when there are fundamental differences between bidders. Asymmetry in capacity constraints plays a more important role under the discriminatory price mechanism, and leads to a reversal of the revenue ranking in a study with an identical experimental design, but where bidders have symmetric capacity constraints (SSZ (2004)). These results suggest that the optimal auction format may depend on factors specific to a particular auction setting.

Keywords: Divisible good auctions, experimental economics, treasury auctions

Suggested Citation

Sade, Orly and Schnitzlein, Charles R. and Zender, Jaime F., Asymmetry in Divisible Good Auctions: An Experimental Investigation. Available at SSRN: https://ssrn.com/abstract=653283 or http://dx.doi.org/10.2139/ssrn.653283

Orly Sade (Contact Author)

Hebrew University of Jerusalem - Department of Finance ( email )

Mount Scopus
Jerusalem, 91905
Israel
972 2 588 3227 (Phone)

Charles R. Schnitzlein

School of Business, University of Vermont ( email )

Burlington, VT 05405
United States
802-656-9281 (Phone)

Jaime F. Zender

University of Colorado at Boulder - Department of Finance ( email )

Boulder, CO 80309
United States
303-554-1665 (Phone)
303-492-4689 (Fax)

HOME PAGE: http://www-bus.colorado.edu/faculty/Zender/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
7
Abstract Views
333
PlumX Metrics