Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86970
Authors: 
Onderstal, Sander
van der Veen, Ailko
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-024/1
Abstract: 
If a government auctions the right to market a good, continuity is likely to be of significant importance. In a laboratory experiment, we compare the effects of bidders' limited liability in the first-price sealed-bid auction and the English auction in a common value setting. Our data strongly reject our theoretical prediction that the English auction leads to less aggressive bids and fewer bankruptcies than the first-price sealed-bid auction. X-cursedness gives a robust explanation of our experimental observations, in contrast to risk aversion and asymmetric equilibria.
Subjects: 
Auctions
Bankruptcy
Laboratory Experiment
JEL: 
C91
D44
L41
Document Type: 
Working Paper

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