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Experimental internet auctions with random information retrieval

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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Correspondence to Doron Sonsino.

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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