Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31716
Authors: 
Kirchkamp , Oliver
Reiss, J. Philipp
Year of Publication: 
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

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