Premium Auctions in the Field

Tinbergen Institute Discussion Paper 2017-024/VII

20 Pages Posted: 21 Feb 2017

See all articles by Sander Onderstal

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Date Written: February 15, 2017

Abstract

In a field experiment, we study the revenue-generating properties of premium auctions. In a premium auction, the runner-up obtains a premium for driving up the price paid by the winner. Previous research, both theoretical and in the lab, has shown that the relative performance of premium auctions compared to standard auction formats is context-specific. In the experiment, we compare two types of premium auctions with the standard Vickrey auction selling high-quality, limited-edition posters in an online auction. We observe that neither premium auction raises higher revenue than the Vickrey auction. The variance of the revenue in the Amsterdam auction, one of the premium auctions, is lower than that in the Vickrey auction.

Keywords: Premium auctions, field experiment

JEL Classification: C93, D44

Suggested Citation

Onderstal, Sander, Premium Auctions in the Field (February 15, 2017). Tinbergen Institute Discussion Paper 2017-024/VII, Available at SSRN: https://ssrn.com/abstract=2920442 or http://dx.doi.org/10.2139/ssrn.2920442

Sander Onderstal (Contact Author)

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
327
PlumX Metrics