Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229691 
Year of Publication: 
2020
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2020-071/I
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
The popularity of open ascending auctions is often attributed to the fact that openly observable bidding allows to aggregate dispersed information. Another reason behind the frequent utilization of open auction formats may be that they activate revenue enhancing biases. In an experiment, we compare three auctions that differ in how much information is revealed and in the potential activation of behavioral biases: (i) the ascending Vickrey auction, a closed format; and two open formats, (ii) the Japanese-English auction and (iii) the Oral Outcry auction. Even though bidders react to information conveyed in others’ bids, information aggregation fails in both open formats. In contrast, the Oral Outcry raises higher revenue than the other two formats, by stimulating bidders to submit unprofitable jump bids and triggering a quasi-endowment effect.
Subjects: 
ascending auctions
information aggregation
jump bidding
auction fever
JEL: 
C90
D44
D82
Document Type: 
Working Paper

Files in This Item:
File
Size
1.32 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.