Goeree, Jacob K. and Plott, Charles R. and Wooders, John
(2004)
Bidders' Choice Auctions: Raising Revenues Through the Right to Choose.
Journal of the European Economic Association, 2
(2-3).
pp. 504-515.
ISSN 1542-4766.
doi:10.1162/154247604323068186.
https://resolver.caltech.edu/CaltechAUTHORS:20140303-103231406
Use this Persistent URL to link to this item: https://resolver.caltech.edu/CaltechAUTHORS:20140303-103231406
Abstract
Sales of multiple real estate properties are often conducted via a sequence of ascending auctions, giving the winner at each stage the right to choose one of the available lots. We show that when bidders are risk averse, such "bidders' choice" auctions raise more revenues then standard simultaneous or sequential ascending auctions. We also report the results of laboratory experiments to investigate the effectiveness of bidders' choice auctions vis-a-vis the simultaneous ascending auction. The revenue-superiority of the bidders' choice auction is corroborated by the experimental data. Finally, we compare observed bidders' choice auction is corroborated by the experimental data. Finally, we compare observed bidding behavior in the experiments with theoretically predicted bids to estimate a common risk aversion parameter from the data.
| Item Type: | Article |
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| Additional Information: | © 2004 by the European Economic Association.
We are grateful to Roberto Burguet for very helpful suggestions, and to Larry
Ausubel, Tim Cason, and participants at the European Economic Association Meetings in Stockholm
(August, 2003) for comments. We acknowledge financial support from the Alfred P. Sloan
Foundation, the National Science Foundation, and the Caltech Laboratory for Experimental
Economics and Political Science.
Formerly SSWP 1181. |
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| Group: | Social Science Working Papers |
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| Funders: | | Funding Agency | Grant Number |
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| Alfred P. Sloan Foundation | UNSPECIFIED | | NSF | UNSPECIFIED | | Caltech Laboratory for Experimental Economics and Political Science | UNSPECIFIED |
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| Other Numbering System: | | Other Numbering System Name | Other Numbering System ID |
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| Social Science Working Paper | 1181 |
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| Issue or Number: | 2-3 |
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| Classification Code: | JEL: D44, C72 |
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| DOI: | 10.1162/154247604323068186 |
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| Record Number: | CaltechAUTHORS:20140303-103231406 |
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| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20140303-103231406 |
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| Official Citation: | Goeree, J. K., Plott, C. R. and Wooders, J. (2004), BIDDERS' CHOICE AUCTIONS: RAISING REVENUES THROUGH THE RIGHT TO CHOOSE. Journal of the European Economic Association, 2: 504–515. doi: 10.1162/154247604323068186 |
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| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. |
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| ID Code: | 44081 |
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| Collection: | CaltechAUTHORS |
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| Deposited By: | INVALID USER |
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| Deposited On: | 03 Mar 2014 19:16 |
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| Last Modified: | 10 Nov 2021 16:47 |
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