AUCTIONS WITH LEAKS ABOUT EARLY BIDS: ANALYSIS AND EXPERIMENTAL BEHAVIOR

Sven Fischer, Werner Güth, Todd R. Kaplan, Ro'i Zultan

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

In sequential first- and second-price private value auctions, second movers are informed about the first movers' bid with commonly known probability. Equilibrium bidding in first-price auctions is mostly unaffected, but there are multiple equilibria in second-price auctions affecting comparative statics across price rules. We show experimentally that informational leaks in first-price auctions qualitatively confirm the theoretical predictions. In second-price auctions, we analyze and experimentally confirm the existence of focal equilibria, and provide evidence for individual consistency in equilibrium selection. (JEL D44, C72, C91).

Original languageEnglish
Pages (from-to)722-739
Number of pages18
JournalEconomic Inquiry
Volume59
Issue number2
DOIs
StatePublished - 1 Apr 2021

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics

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