Outside options: Another reason to choose the first-price auction
In this paper we study equilibrium and experimental bidding behaviour in first-price and second-price auctions with outside options. We find that bidders do respond to outside options and to variations of common knowledge about competitors' outside options. However, overbidding in first-price auctions is significantly higher with outside options than without. First-price auctions yield more revenue than second-price auctions. This revenue-premium is significantly higher with outside options. In second-price auctions the introduction of outside options has only a small effect.
Year of publication: |
2009
|
---|---|
Authors: | Kirchkamp, Oliver ; Poen, Eva ; Rei, J. Philipp |
Published in: |
European Economic Review. - Elsevier, ISSN 0014-2921. - Vol. 53.2009, 2, p. 153-169
|
Publisher: |
Elsevier |
Keywords: | Auction Outside options Experiments Revenue-premium First-price auction Second-price auction Overbidding Strategy method |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Outside options: another reason to choose the first-price auction
Kirchkamp, Oliver, (2008)
-
Kirchkamp, Oliver, (2004)
-
Outside options: Another reason to choose the first-price auction
Kirchkamp, Oliver, (2008)
- More ...