Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/213106 
Year of Publication: 
2019
Series/Report no.: 
ZEW Discussion Papers No. 19-062
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We study the role of commitment in a first-price auction environment. We devise a simple two-stage model in which bidders first submit an initial offer that the auctioneer can observe and then make a counteroffer. There is no commitment on the auctioneer's side to accept an offer as is or even to choose the lowest bidder. We compare this setting to a standard first-price auction both theoretically and experimentally. While theory suggests that the offers and the auctioneer's revenue should be higher in a standard first-price auction compared to the first-price auction with renegotiation, we cannot confirm these hypotheses in the experiment.
Subjects: 
Auctions
Experiment
JEL: 
D44
D47
Document Type: 
Working Paper

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