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Title:Heterogeneous bids in auctions with rational and markdown bidderstheory and experiment PDF Logo
Authors:Kirchkamp , Oliver
Reiss, J. Philipp
Issue Date:2008
Series/Report no.:Jena economic research papers 2008,066
Abstract:We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding in first-price auctions. We investigate how the amount of underbidding depends on seemingly innocent parameters of the experimental setup. To structure our data we present and test a theory of constant markdown bids. While a fraction of bidders can be well described by Bayesian Nash equilibrium bids, a larger fraction seems to either use constant markdown bids or seems to rationally optimise against a population where some members use markdown bids and some are rational.
Subjects:Auction
experiment
overbidding
underbidding
risk-aversion.
JEL:C92
D44
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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