Bidding Behavior in Multi-Unit Auctions - an Experimental Investigation and Some Theoretical Insights

CERGE-EI Working Paper No. 210

Posted: 24 Apr 2005

See all articles by Dirk Engelmann

Dirk Engelmann

University of London - Royal Holloway - Department of Economics

Veronika Grimm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics

Date Written: June 2003

Abstract

We present laboratory experiments of five different multi-unit auction mechanisms. Two units of a homogeneous object were auctioned off among two bidders with at demand for two units. We test whether expected demand reduction occurs in open and sealed-bid uniform-price auctions. Revenue equivalence is tested for these auctions as well as for the Ausubel, the Vickrey and the discriminatory sealed-bid auction. Furthermore, we compare the five mechanisms with respect to the efficient allocation of the units. We also provide some theoretical insights concerning the equilibria of uniform-price auctions with incomplete information.

Keywords: Multi-Unit Auctions, Demand Reduction, Experimental Economics

JEL Classification: D44, C91

Suggested Citation

Engelmann, Dirk and Grimm, Veronika, Bidding Behavior in Multi-Unit Auctions - an Experimental Investigation and Some Theoretical Insights (June 2003). CERGE-EI Working Paper No. 210, Available at SSRN: https://ssrn.com/abstract=675745

Dirk Engelmann (Contact Author)

University of London - Royal Holloway - Department of Economics ( email )

Egham, TW20 0EX
United Kingdom

Veronika Grimm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics ( email )

Nuremburg
Germany

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