Uniform-Price Auctions without Exogenous Uncertainty: An experimental study

This paper reports results of an experimental study of uniform multi-unit auctions in an environment of publicly known common values. We find that the bidding behavior exhibits two clear regularities: agents consistently play weakly dominated strategies by overbidding on the first unit and have difficulty coordinating on high payoff (low auction revenue) equilibria. In addition, the nature of prior experience seems to have a crucial impact on behavior: subjects with experience in single-unit second-price auctions do not overbid, while subjects with experience in multi-unit uniform-price auctions are better at reducing demand to achieve higher payoff.