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Multiple Items, Ascending Price Auctions: An Experimental Examination of Alternative Auction Sequences

Kim, Dae Hyun and Lee, Hsing Yang and Maron, Travis and Plott, Charles R. and Teo, Ruijie D. (2015) Multiple Items, Ascending Price Auctions: An Experimental Examination of Alternative Auction Sequences. Social Science Working Paper, 1406. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20160222-134834747

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Abstract

The paper investigates the revenue and efficiency of different ascending price auction architectures for the sale of three items and five bidders. Four architectures are studied: two different sequences of single item auctions, simultaneous auctions with a common countdown clock, and simultaneous auctions with item specific countdown clocks. A countdown clock measures the time until the auction closes but resets with each new bid. The environment contains independent private values, no uncertainty about own preferences, no information about other’s preferences, and a one unit budget constraint. The Nash equilibrium best response with straight forward bidding fits both dynamic and outcome data well. When non-unique Nash equilibria exist as in the case of simultaneous markets with a common clock, the social value maximizing Nash equilibrium emerges as the equilibrium selection. Both total revenue and efficiencies depend on the architecture as predicted by the Nash model, with the exception of the independent clocks architecture, which performs poorly on all dimensions.


Item Type:Report or Paper (Working Paper)
Additional Information:The financial support of the Gordon and Betty Moore Foundation is gratefully acknowledged. Special acknowledgement is given to class members Sarah Brandsen, Wen Min Chen, Rebecca Hu, and Emily Jensen who contributed to the early development of the research. We thank Matthew Elliot, Ben Gillen, Dave Grether, Katrina Scherstyuk, Kirill Pogorelskiy, Fabio Michelucci and Robert Sherman for their many helpful comments.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
Gordon and Betty Moore FoundationUNSPECIFIED
Record Number:CaltechAUTHORS:20160222-134834747
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20160222-134834747
Official Citation:Dae Hyun Kim, Hsing Yang Lee, Travis Maron, Charles R. Plott, Ruijie D. Teo. Multiple Items, Ascending Price Auctions: An Experimental Examination of Alternative Auction Sequences. Pasadena, CA: California Institute of Technology, 2015. Social Science Working Paper, 1406.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:64638
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:02 Mar 2016 21:57
Last Modified:02 Mar 2016 21:57

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