Abstract
This paper considers two multi-item auction formats (ascending and sealed bid) which both identify the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theoretical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of the investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.
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We are grateful to the anonymous referee and the Editor in charge of this paper for helpful comments and suggestions. Financial support from the Jan Wallander and Tom Hedelius Foundation is gratefully acknowledged by all three authors.
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Andersson, C., Andersson, O. & Andersson, T. Sealed bid auctions versus ascending bid auctions: an experimental study. Rev Econ Design 17, 1–16 (2013). https://doi.org/10.1007/s10058-012-0129-3
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DOI: https://doi.org/10.1007/s10058-012-0129-3