A random nth-price auction
Abbreviated Journal Title
J. Econ. Behav. Organ.
auctions; demand revelation; experimental valuation; WILLINGNESS; ACCEPT; PAY; VALUES; TESTS; Economics
Second-price auctions are designed to induce people to reveal their private preferences for a good. Laboratory evidence suggests that while these auctions do a reasonable job on aggregate, they fall short at the individual level, especially for bidders who are off-margin of the market-clearing price. Herein we introduce and explore whether a random nth-price auction can engage. all bidders to bid sincerely. Our results first show that the random nth-price auction can induce sincere bidding in theory and practice. We then compare the random nth-price to the second-price auction. We find that the second-price auction works better on-margin, and the random nth-price auction works better off-margin. (C) 2001 Elsevier Science B.V. All rights reserved.
Journal of Economic Behavior & Organization
"A random nth-price auction" (2001). Faculty Bibliography 2000s. 8224.