Experimental evidence on English Auctions: Oral outcry versus clock

Ricardo Goncalves; John Denis Hey

doi:10.1111/j.1467-8586.2009.00337.x

Experimental evidence on English Auctions: Oral outcry versus clock

Ricardo Goncalves, John Denis Hey

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner's curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.

Original language	English
Pages (from-to)	313-352
Number of pages	40
Journal	Bulletin of Economic Research
Volume	63
Issue number	4
DOIs	https://doi.org/10.1111/j.1467-8586.2009.00337.x
Publication status	Published - Oct 2011

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10.1111/j.1467-8586.2009.00337.x

http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8586.2009.00337.x/abstract;jsessionid=36DCFD7FE354C6A3B7B75D255B7BACBB.d04t04

Cite this

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title = "Experimental evidence on English Auctions: Oral outcry versus clock",

abstract = "This paper tests experimentally, in a common value setting, the equivalence between the Japanese English auction (or clock auction) and an oral outcry auction where bidders are allowed to call their own bids. We find that (i) bidding behaviour is different in each type of auction, but also that (ii) this difference in bidding behaviour does not affect significantly the auction prices. This lends some support to the equivalence between these two types of auction. The winner's curse is present: overbidding led to higher than expected prices (under Nash bidding strategies) in both types of auction. Although interesting and encouraging, the results clearly indicate that further research is necessary, particularly with a modified experimental design.",

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