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).
Bibliographical notePublisher Copyright:
© 2020 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.
ASJC Scopus subject areas
- General Business, Management and Accounting
- Economics and Econometrics