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Experimental internet auctions with random information retrieval

Experimental Economics volume 9, pages 323–341 (2006)Cite this article

Abstract

We run an experiment where 97 subjects could retrieve records of completed past auctions before placing their bids in current one-bid, two-bid, and auction-selection games. Each subject was asked to participate in 3 current auctions; but could retrieve up to 60 records of completed (past) auctions. The results reveal a positive relation between the payoffs earned by the subjects and their history-inspection effort. Subjects act as if responding to the average bidding-ratios of the winners in the samples that they have retrieved. They apply intuitive signal-dependent stopping rules like “sample until observing a winner-value close to my won” or “find a close winner-value and try one more history” when sampling the databases. History-inspection directs bidders with relatively high private-valuations to moderate bidding which increases their realized payoffs. (JEL C9 D4 D8)

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Authors and Affiliations

  1. The School of Business Administration, The College of Management, 7 Rabin Boulevard, POB 9017, Rishon LeZion, Israel, 75190

    Doron Sonsino

  2. Department of economics, Institute for Economic Theory III, Spandauer Strasse 1, 10178, Berlin, Germany

    Radosveta Ivanova-Stenzel

Authors
  1. Doron Sonsino
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  2. Radosveta Ivanova-Stenzel
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Correspondence to Doron Sonsino.

Additional information

JEL Classification C93, D44, D83

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Sonsino, D., Ivanova-Stenzel, R. Experimental internet auctions with random information retrieval. Exp Econ 9, 323–341 (2006). https://doi.org/10.1007/s10683-006-7050-y

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  • DOI: https://doi.org/10.1007/s10683-006-7050-y

Keywords

  • Internet-auctions
  • observational learning
  • sampling rules
  • experiments