9. Auctions A Survey of Experimental Research

Kagel, John H.; Levin, Dan

doi:10.1515/9781400883172-010

Cited by 202 publications

(167 citation statements)

References 147 publications

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“…There is consistent overbidding as witnessed by the higher empirical intercept in G1 and G2 under both mechanisms. This finding is consistent with the existing literature, which reports higher bids than risk neutral Nash predictions in F auctions and bids above value on average in S auctions [1,15].…”

Section: Aggregate Bidding Functionssupporting

confidence: 93%

“…Not surprisingly considering the existing literature auctions (see [1,15] for reviews), we find that subjects in our experiment deviate from the theoretical predictions, with an overall tendency to bid above the risk neutral Nash equilibrium in first-price auctions and above the dominant strategy in second-price auctions. Subjects also exhibit a qualitatively similar bidding behavior across mechanisms.…”

Section: Introductionsupporting

confidence: 39%

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Sequential Auctions with Capacity Constraints: An Experimental Investigation

Otamendi

Brocas

Carrillo

2018

Games

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Abstract:We conduct a laboratory experiment where groups of 4 subjects constrained to obtain at most one good each, sequentially bid for three goods in first and second price auctions. Subjects learn at the beginning of each auction their valuation for the good and exit the auction once they have obtained one good. We show that, contrary to equilibrium predictions, subjects' bidding behavior is excessively similar across units and across mechanisms at the aggregate level. We provide two (complementary) explanations for these departures. One is bounded rationality. Subjects do not fully comprehend subtle differences between mechanisms. The other is self-selection. Subjects are very heterogeneous and some of them deviate more from equilibrium than others. Since deviations take mostly the form of overbidding, these subjects win the first or second good and exit the auction, leaving those who play closer to theoretical predictions to bid for the third good. Support for this hypothesis comes from the documented higher bidding, lower efficiency and lower profits associated with the first and second unit compared to the third one.

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Section: Aggregate Bidding Functionssupporting

confidence: 93%

Section: Introductionsupporting

confidence: 39%

Sequential Auctions with Capacity Constraints: An Experimental Investigation

Otamendi

Brocas

Carrillo

2018

Games

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“…Our null finding for basal cortisol is not surprising given the mixed evidence on the association the weak evidence on cortisol and risk aversion , and the mixed evidence for risk aversion in first-price auctions (Kagel, 1995).…”

Section: Discussionmentioning

confidence: 61%

Sex Hormones and Competitive Bidding

Schipper

2015

Management Science

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We correlate competitive bidding and profits in symmetric independent private value first-price auctions with salivary testosterone, estradiol, progesterone, and cortisol in more than 200 subjects. Bids are significantly positively correlated and profits are significantly negatively correlated with basal salivary progesterone but only for females who do not use hormonal contraceptives. Surprisingly, we have null findings for basal testosterone, estradiol, and cortisol for both males and females. We show that our finding for progesterone is not mediated by risk aversion or bidding mistakes. No hormone responds to total profits in the auctions except for a small positive response of the stress hormone cortisol in males.

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“…Our results underscore the importance of adjusting for measurement error in a number of settings and have implications for the design and interpretation of empirical research seeking to account for heterogeneity in risk aversion. For example, risk aversion is often a confound when testing auction theory, and researchers often include a measure of risk aversion similar to the ones considered here as a control variable when testing the theory (see the review in Kagel and Levin, 1995). Our results imply risk aversion can remain a large confound if researchers fail to properly adjust for measurement error.…”

Section: Resultsmentioning

confidence: 84%

The psychometric and empirical properties of measures of risk preferences

2017

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We examine the psychometric and empirical properties of some commonly used survey-based measures of risk preferences in a population-based sample of 11,000 twins. Using a model that provides a general framework for making inferences about the component of measured risk attitudes that is not due to measurement error, we show that measurement-error adjustment leads to substantially larger estimates of the predictive power of risk attitudes, of the size of the gender gap, and of the magnitude of the sibling correlation. Risk attitudes are predictive of investment decisions, entrepreneurship, and drinking and smoking behaviors; are robustly associated with cognitive ability and personality; and our estimates are often larger than those Uncertain (2017) 54:203-237 in the literature. Our results highlight the importance of adjusting for measurement error across a wide range of empirical settings.

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9. Auctions A Survey of Experimental Research

Cited by 202 publications

References 147 publications

Sequential Auctions with Capacity Constraints: An Experimental Investigation

Sequential Auctions with Capacity Constraints: An Experimental Investigation

Sex Hormones and Competitive Bidding

The psychometric and empirical properties of measures of risk preferences

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