Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/117889
Authors: 
Onderstal, Sander
Englmaier, Florian
Guillen, Pablo
Llorente, Loreto
Sausgruber, Rupert
Year of Publication: 
2004
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 10.2004
Abstract: 
Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the ‘chopstick auction' in which bidders are confronted with the exposure problem. We analyze the chopstick auction with incomplete information both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is slightly less efficient but yields far more revenue than the second-price sealed-bid auction.
Subjects: 
Chopstick auction
Exposure problem
Laboratory experiment
Second-price sealed-bid auction
JEL: 
C9
D44
Document Type: 
Working Paper

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