Varying the number of bidders in the first-price sealed-bid auction: experimental evidence for the one-shot game. (English) Zbl 1273.91215
Summary: The paper reports experimental data on the behavior in the first-price sealed-bid auction for a varying number of bidders when values and bids are private information. This feedback-free design is proposed for the experimental test of the one-shot game situation. We consider both within-subjects and between-subjects variations. In line with the qualitative risk neutral Nash equilibrium prediction, the data show that bids increase in the number of bidders. However, in auctions involving a small number of bidders, average bids are above, and in auctions involving a larger number of bidders, average bids are below the risk neutral equilibrium prediction. The quartile analysis reveals that bidding behavior is not constant across the full value range for a given number of bidders. On the high value quartiles, however, the average bid-value ratio is not different from the risk neutral prediction. The behavior is different when the winning bid is revealed after each repetition.
MSC:
| 91B26 | Auctions, bargaining, bidding and selling, and other market models |
| 91B44 | Economics of information |
| 91A10 | Noncooperative games |
Keywords:
first-price sealed-bid auction; experiment; within-subject variation; between-subject variation; feedbackSoftware:
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