Elicited Bid Functions in (A)Symmetric First-Price Auctions

CentER Discussion Paper No. 2003-58

35 Pages Posted: 11 Jun 2004

See all articles by Paul Pezanis-Christou

Paul Pezanis-Christou

U. of Adelaide School of Economics

Abdolkarim Sadrieh

University of Magdeburg

Date Written: 2003

Abstract

We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.

Keywords: Asymmetric first-price auctions, private independent values, elicited bid functions, constant relative risk aversion, empirical best replies, experimental methods

JEL Classification: D44, C90

Suggested Citation

Pezanis-Christou, Paul and Sadrieh, Abdolkarim, Elicited Bid Functions in (A)Symmetric First-Price Auctions (2003). CentER Discussion Paper No. 2003-58, Available at SSRN: https://ssrn.com/abstract=556077 or http://dx.doi.org/10.2139/ssrn.556077

Paul Pezanis-Christou (Contact Author)

U. of Adelaide School of Economics

Adelaide
Australia

Abdolkarim Sadrieh

University of Magdeburg ( email )

Faculty of Economics and Management
Postbox 4120
39016 Magdeburg
Germany

HOME PAGE: http://www.ww.uni-magdeburg.de

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

Paper statistics

Downloads
65
Abstract Views
841
rank
414,200
PlumX Metrics