Posted Prices and Bid Affiliation: Evidence from Experimental Auctions

Posted: 13 Oct 2006

See all articles by Jay R. Corrigan

Jay R. Corrigan

Kenyon College - Department of Economics

Matthew C Rousu

Susquehanna University - Economics

Multiple version iconThere are 2 versions of this paper

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.

Suggested Citation

Corrigan, Jay R. and Rousu, Matthew C, Posted Prices and Bid Affiliation: Evidence from Experimental Auctions. American Journal of Agricultural Economics, Vol. 88, No. 4, pp. 1078-1090, November 2006, Available at SSRN: https://ssrn.com/abstract=937058 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 - Economics ( email )

Selinsgrove, PA 17870
United States
570 372-4186 (Phone)

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