Breitmoser, Yves Schweighofer-Kodritsch, Sebastian
Year of Publication:
WZB Discussion Paper No. SP II 2019-203
Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin
Li (2017) supports his theoretical notion of obviousness of a dominant strategy with experimental evidence that bidding is closer to dominance in the dynamic ascending clock than the static second-price auction (private values). We replicate his experimental study and add three intermediate auction formats to decompose this behavioral improvement into cumulative effects of (1) seeing an ascending-price clock (after bid submission), (2) bidding dynamically on the clock and (3) getting drop-out information. Li's theory predicts dominance to become obvious through (2) dynamic bidding. We find no significant behavioral effect of (2). However, both (1) and (3) are highly significant.
strategy proofness experiments private value auction