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Bidders' Choice Auctions: Raising Revenues Through the Right to Choose

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. https://resolver.caltech.edu/CaltechAUTHORS:20140303-103231406

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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
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1162/154247604323068186DOIArticle
http://onlinelibrary.wiley.com/doi/10.1162/154247604323068186/abstractPublisherArticle
http://resolver.caltech.edu/CaltechAUTHORS:20171129-151426917Related ItemSSWP 1181
ORCID:
AuthorORCID
Goeree, Jacob K.0000-0001-9876-3425
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.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
Alfred P. Sloan FoundationUNSPECIFIED
NSFUNSPECIFIED
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Other Numbering System:
Other Numbering System NameOther Numbering System ID
Social Science Working Paper1181
Issue or Number:2-3
Classification Code:JEL: D44, C72
Record Number:CaltechAUTHORS:20140303-103231406
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140303-103231406
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
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44081
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:03 Mar 2014 19:16
Last Modified:03 Oct 2019 06:14

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