A random nth-price auction

    Authors

    J. F. Shogren; M. Margolis; C. Koo;J. A. List

    Abbreviated Journal Title

    J. Econ. Behav. Organ.

    Keywords

    auctions; demand revelation; experimental valuation; WILLINGNESS; ACCEPT; PAY; VALUES; TESTS; Economics

    Abstract

    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 Title

    Journal of Economic Behavior & Organization

    Volume

    46

    Issue/Number

    4

    Publication Date

    1-1-2001

    Document Type

    Article

    Language

    English

    First Page

    409

    Last Page

    421

    WOS Identifier

    WOS:000171744200004

    ISSN

    0167-2681

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