Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108531
Authors: 
Fischer, Sven
Güth, Werner
Kaplan, Todd R.
Zultan, Ro'i
Year of Publication: 
2014
Series/Report no.: 
Jena Economic Research Papers 2014-027
Abstract: 
We study first- and second-price private value auctions with sequential bidding where second movers may discover the first movers bids. There is a unique equilibrium in the first-price auction and multiple equilibria in the second-price auction. Consequently, comparative statics across price rules are equivocal. We experimentally find that in the first-price auction, leaks benefit second movers but harm first movers and sellers. Low to medium probabilities of leak eliminate the usual revenue dominance of first-price over second-price auctions. With a high probability of a leak, second-price auctions generate higher revenue.
Subjects: 
auctions
collusion
espionage
laboratory experiments
JEL: 
C72
C91
D44
Document Type: 
Working Paper

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