An experimental examination of demand reduction in multi‐unit versions of the Uniform‐price, Vickrey, and English auctions

Porter, David; Vragov, Roumen

doi:10.1002/mde.1281

Cited by 33 publications

(24 citation statements)

References 9 publications

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“…There have been several private value auction experiments with two bidders and two units for sale where the market price is the highest losing price. The payoffdominant equilibrium requires subjects bid their private values for the first unit and zero for the second unit, but the common outcome of such experiments is that bidders bid at or above the value for the first unit, and bid lower than the value but higher than zero for the second unit (see Kagel and Levin (2001), Porter and Vragov (2006); Engelmann and Grimm (2009)). In general, collusive bidding is rarely observed in experimental uniform price sealed bid auctions.…”

Section: Discussionmentioning

confidence: 99%

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Sefton¹,

Zhang²

2013

Research in Experimental Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe use laboratory experiments to compare allocation rules in uniform price divisible good auctions. "Standard" and "uniform" allocation rules admit different types of low-price equilibria, which are eliminated by a "hybrid" rule. We observe little evidence of revenue differences among the allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate, and collusive when bidders can explicitly communicate. With explicit communication we find that collusive agreements are more fragile when the gain from a unilateral deviation is larger. We also find that the standard allocation rule is particularly vulnerable to collusive equilibria.

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Section: Discussionmentioning

confidence: 99%

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Sefton¹,

Zhang²

2013

Research in Experimental Economics

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“…The theoretical equilibria of the sealed-bid uniform price auction and the English clock auction (also a uniform price auction) are indistinguishable (Porter & Vragov, 2006). However, because these auction types yield multiple equilibria in a multi-unit context, as bidders attempt to coordinate their actions (tacitly or explicitly), different auction designs may result in systematically different outcomes.…”

Section: Introductionmentioning

confidence: 97%

Collusion in auctions for emission permits: An experimental analysis

Burtraw

Goeree²,

Holt

et al. 2009

J Policy Anal Manage

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Environmental markets have several institutional features that provide a new context for the use of auctions and that have not been studied previously. This paper reports on laboratory experiments testing three auction forms-uniform and discriminatory price sealed-bid auctions and an ascending clock auction. We test the ability of subjects to tacitly or explicitly collude in order to maximize profits. Our main result is that the discriminatory and uniform price auctions produce greater revenues than the clock auction, both with and without explicit communication. The clock appears to facilitate successful collusion, both because of its sequential structure and because it allows bidders to focus on one dimension of cooperation (quantity) rather than two (price and quantity).© 2009 by the Association for Public Policy Analysis and Management.

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“…This stands in marked contrast to the sincere bidding predicted for unit 1bids in both cases. Porter and Vragov (2006) 57 Their experimental design is hampered by the fact that subject pairings remain fixed over the full set of 10 auctions in each treatment, which leads to scattered efforts to promote collusive outcomes. However, after factoring out these collusive efforts, they conclude that their primary results are well in line with those reported in KL: (1) there is more demand reduction in the uniform-price clock auctions than in the uniform-price sealed-bid auctions, (2) there is close to sincere bidding in the Ausubel auction, and (3) there is a higher frequency of bidding above value on unit 1 bids in the uniform-price sealed-bid auction than in the uniform-price clock auction or the Ausubel auction.…”

mentioning

confidence: 99%