AUCTIONS WITH LEAKS ABOUT EARLY BIDS: ANALYSIS AND EXPERIMENTAL BEHAVIOR

Sven Fischer, Werner Güth, Todd R. Kaplan, Ro'i Zultan

Research output: Contribution to journalArticlepeer-review

Abstract

In sequential first- and second-price private value auctions, second movers are informed about the first movers' bid with commonly known probability. Equilibrium bidding in first-price auctions is mostly unaffected, but there are multiple equilibria in second-price auctions affecting comparative statics across price rules. We show experimentally that informational leaks in first-price auctions qualitatively confirm the theoretical predictions. In second-price auctions, we analyze and experimentally confirm the existence of focal equilibria, and provide evidence for individual consistency in equilibrium selection. (JEL D44, C72, C91).

Original languageEnglish
Pages (from-to)722-739
Number of pages18
JournalEconomic Inquiry
Volume59
Issue number2
DOIs
StatePublished - Apr 2021

Bibliographical note

Funding Information:
We thank Paul Heihues, Jason Shachat, Georg Weizs?cker, and two anonymous referees for their very helpful comments and suggestions, as well as the audiences at the IMPRS in Jena, Colloquium in Behavioural Economics at Technische Universit?t Berlin, Durham University, Newcastle University, University of Exeter, East China Normal University, and the SAET Meeting in Cambridge.

Publisher Copyright:
© 2020 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.

ASJC Scopus subject areas

  • Business, Management and Accounting (all)
  • Economics and Econometrics

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