# Bid pooling in reverse multi-unit Dutch auctions: an experimental investigation

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## Abstract

In this article we experimentally investigate reverse multi-unit Dutch auctions in which bidders compete to sell their single unit to a buyer who wants to purchase several objects. Our study yields three insights: (i) bids are substantially higher than Nash equilibrium bids predicted by standard economic theory; (ii) these higher-than-predicted prices gradually decline in later periods; and (iii) bid pooling (or simultaneous bidding) is frequently observed—the majority of bidders submit their bids immediately after the first bidder has sold his unit. A model that distinguishes between myopic and sophisticated bidding strategies helps to organize these patterns both on the aggregate and on the individual level.

## Keywords

Bounded rationality Multi-unit auction Procurement Reverse Dutch auction## JEL Classification

D44 D01 C91## References

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