Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/174372 
Year of Publication: 
2017
Series/Report no.: 
Jena Economic Research Papers No. 2017-012
Version Description: 
Revised Version of JERP 2014-027
Publisher: 
Friedrich Schiller University Jena, Jena
Abstract: 
In first- and second-price private value auctions with sequential bidding, second movers may discover the first movers' bid. Equilibrium behavior in the first-price auction is mostly unaffected but there are multiple equilibria in the second- price auction. Consequently, comparative statics across price rules are equivocal. Experimentally, leaks in the first- price auction favor second movers but harm first movers and sellers, as theoretically predicted. Low to medium leak probabilities eliminate the usual revenue dominance of first- over second-price auctions. With a high leak probability, second-price auctions generate significantly more revenue.
Subjects: 
auction
collusion
espionage
laboratory experiment
JEL: 
C72
C91
D44
Document Type: 
Working Paper

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