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

Abstract

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.

Pivotal Suppliers and Market Power in Experimental Supply Function Competition

“…treatments with market power, the observations appear to be more or less uniformly spread over the predicted interval of smooth SFE prices. 20 Our symmetrical, high-capacity treatments (hsh and hsl) are similar in some respects to the multi-unit sales auction experiments reported in Sefton and Zhang (2010). In their no-communication treatment, they find that subjects' bids converge to their values, which is consistent with pure strategy Nash equilibrium.…”

“…Our symmetrical, high‐capacity treatments ( hsh and hsl ) are similar in some respects to the multi‐unit sales auction experiments reported in Sefton and Zhang (). In their no‐communication treatment, they find that subjects’ bids converge to their values, which is consistent with pure strategy Nash equilibrium .…”

“…Our experiments bear some similarity to multi-unit auction experiments reported in Sefton and Zhang (2010); these are sales auctions with three buyer subjects, in contrast to our procurement auctions with four seller subjects. Subjects in their experiments bid on multiple discrete units, and bids for individual units are from a discrete price grid.…”

Pivotal Suppliers and Market Power in Experimental Supply Function Competition

“…Our symmetric, high-capacity treatments (hsh and hsl) are similar in some respects to the multi-unit sales auction experiments reported on in Sefton and Zhang (2010). In their nocommunication treatment, they find that subjects' bids converge to the discrete-units Nash equilibrium prediction of bids equal to values.…”

“…Our experiments bear some similarity to multi-unit auction experiments reported on in Sefton and Zhang (2010); these are sales auctions with three buyer subjects, in contrast to our procurement auctions with four seller subjects. The discrete units Nash equilibrium prediction in Sefton and Zhang is for each buyer to bid their value (roughly corresponding to subjects offering units at marginal cost in our experiments).…”