Auction Format Matters: Evidence on Bidding Behavior and Seller Revenue

30 Pages Posted: 15 Feb 2006

See all articles by Robert Feldman

Robert Feldman

Independent

Vincent R. Reinhart

American Enterprise Institute (AEI)

Date Written: May 1995

Abstract

This paper evaluates the importance of auction format on bidding behavior and seller revenue, focusing on differences in performance under uniform-price and discriminatory-price formats. The analysis is based on a standard benchmark model from which empirically-testable hypotheses are derived on the optimal amount of bid shading that generates revenue equivalence between the two formats. Applying this model to data from the IMF gold auctions run in 1976-80, we find evidence of statistically significant shading in excess of the theoretically-derived optimum under the discriminatory format. This evidence suggests greater seller revenue under the uniform-price format.

JEL Classification: C15, D44

Suggested Citation

Feldman, Robert and Reinhart, Vincent R., Auction Format Matters: Evidence on Bidding Behavior and Seller Revenue (May 1995). IMF Working Paper, Vol. , pp. 1-30, 1995. Available at SSRN: https://ssrn.com/abstract=883195

Robert Feldman (Contact Author)

Independent

No Address Available

Vincent R. Reinhart

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
73
Abstract Views
861
rank
326,954
PlumX Metrics