Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334461 
Year of Publication: 
2026
Series/Report no.: 
QBS Working Paper No. 2026/01
Publisher: 
Queen's University Belfast, Queen's Business School, Belfast
Abstract: 
This paper reports results from a laboratory experiment on a continuous Japanese-English auction in a common-value 'wallet game'. The main objective is to test whether bidders follow the equilibrium bidding strategy predicted by theory. We find systematic deviations from equilibrium behaviour: instead of bidding according to the Nash equilibrium, subjects appear to rely on expected value (EV) bidding. As a consequence, observed auction prices are higher than the theoretical benchmark, and the winner's curse occurs in a substantial fraction of auctions. We analyse bidding behaviour in detail and discuss the implications of our findings.
Subjects: 
Japanese-English auction (JEA)
Wallet game
Continuous bids
Winner’s curse
Expected value bidding
JEL: 
C72
C91
C92
D63
D83
Document Type: 
Working Paper

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