How to run an experimental auction: a review of recent advances

Abstract

In this paper, we review recent advances in experimental auctions and provide practical advice and guidelines for researchers. We focus on issues related to randomisation to treatment and causal identification of treatment effects, design issues such as selection between different elicitation formats, multiple auction groups in a single session and house money effects. We also discuss sample size and power analysis issues in relation to recent trends in experimental research about pre-registration and pre-analysis plans. We position our discussion with respect to how the agricultural economics profession could benefit from practices adapted in the experimental economics community. We then present the pros and cons of moving auction studies from the laboratory to the field and review the recent literature on behavioural factors that have been identified as important for auction outcomes.

Cognitive Ability and Bidding Behavior in Second Price Auctions: An Experimental Study

“…More specifically, subjects in the “high cognitive ability” were informed that everyone in their auction group was in the “top half of all scores of all participants in the room” and subjects in the “low cognitive ability” were informed that everyone in their auction group was in “bottom half of all scores of all participants in the room.” We did not reveal subjects' exact RSPM scores until the end of the experiment. The number of subjects in each group was kept constant to eliminate a potential confound of the size of the auction group (see discussion in Drichoutis, Klonaris, and Papoutsi , and Canavari et al ). Controlling for a subject's test score, we checked whether the allocation to the high or low ability group affects subjects' subsequent behavior.…”

“…We did not reveal subjects' exact RSPM scores until the end of the experiment. The number of subjects in each group was kept constant to eliminate a potential confound of the size of the auction group (see discussion in Drichoutis, Klonaris, andPapoutsi 2017, andCanavari et al 2019). Controlling for a subject's test score, we checked whether the allocation to the high or low ability group affects subjects' subsequent behavior.…”

Transparency, Reproducibility, and the Credibility of Economics Research

“…An interesting new movement hoping to change this is the Peer Reviewer's Openness Initiative, whereby researchers can pledge that after a certain date they will begin to require data sharing at the time of peer review in the articles they referee (Morey et al 2016). 40 If journal reviewers demand en masse to have access to the code and data that generated the results, and new norms develop around this expectation, this might lead to rapid changes in data-sharing practices, given the central role that journal publication plays in scholars' individual professional success and standing.…”

User guide to experimental auctions of vegetatively propagated seed. RTB User Guide

“…Although there may be some value to price feedback (e.g. Corrigan et al 2012), it has become common not to post the results, which can influence bidding behavior (Canavari et al 2019).…”

“…Trust in institutions may also differ between men and women leading to differential preferences for innovations (Akter et al 2016). Women tend to make higher bids in auctions than men, although this is not universal (Canavari et al 2019). A proper research design can allow researchers to identify these differences.…”