Divisible Good Auctions with Asymmetric Information: An Experimental Examination

    Authors

    E. Morales-Camargo; O. Sade; C. Schnitzlein;J. F. Zender

    Comments

    Authors: contact us about adding a copy of your work at STARS@ucf.edu

    Abbreviated Journal Title

    J. Financ. Quant. Anal.

    Keywords

    UNIFORM-PRICE AUCTIONS; SELF-SERVING BIASES; MULTIUNIT AUCTIONS; EMPIRICAL-ANALYSIS; MARKET; OVERCONFIDENCE; COMPETITION; Business, Finance; Economics

    Abstract

    An experimental approach is used to compare bidding behavior and auction performance in uniform-price and discriminatory auctions when there is incomplete information concerning the common value of the auctioned good. In a symmetric information environment, the different auction formats provide the same average revenue. However, when information is asymmetric the discriminatory auction results in higher average revenue than the uniform-price auction. The volatility of revenue is higher in the uniform-price auctions in all treatments. The results, therefore, provide support for the use of the discriminatory format. Subject characteristics and measures of experience in recent auctions are found to be useful in explaining bidding behavior.

    Journal Title

    Journal of Financial and Quantitative Analysis

    Volume

    48

    Issue/Number

    4

    Publication Date

    1-1-2013

    Document Type

    Article

    Language

    English

    First Page

    1271

    Last Page

    1300

    WOS Identifier

    WOS:000330462700010

    ISSN

    0022-1090

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