We analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects in the form of stochastic economies or diseconomies of scale. We show that economies give rise to declining expected equilibrium prices, whereas the converse is not generally true. Moreover,...

We examine learning behavior in auctions and Fair division games with independent private values under two different price rules, first and second price. Participants face these four games repeatedly and submit complete bid functions rather than single bids. This allows us to examine whether...

To be represented by more than one contestant in a contest has advantages and disadvantages. This paper determines the conditions under which it is favorable to send several agents into the contest. -- contests ; Divisionalization ; delegation

In auctions an outside seIler offers a commodity for sale and collects the revenue w hich is achieved. In fair division games the object is owned by the group of bidders. Consequently the auction's revenue is equally distributed among all bidders. In our experiment participants face four auction...

This paper presents the results of experiments carried out in two countries, Germany and Bulgaria, and for different allocation rules (first vs. second price auction vs. fair division game). The data analysis of the sealed-bid, private value-contests compares the bid function in both countries,...

We review an asymmetric auction experiment. Based on Plum (1992) private valuations of the two bidders are independently drawn from distinct but commonly known distributions, one of which stochastically dominating the other. We test the qualitative properties of that model of asymmetric...

The third generation UMTS auction in Germany raised an enormous amount of revenue, and at the same time achieved a more competitive market structure than other UMTS auctions in Europe. The present paper explains the design of that auction, and presents a game theoretic explanation of observed...

The theory of industrial organization has experienced an impressive boom by using the methods of (non-cooperative) game theory. The conclusions depend, however. crucially on subtle details of the market decision processes about which there exist no or little empirical information. Studies of...

This study examines bidder preferences between alternative auction institutions. In particular we seek to experimentally characterize the degree to which bidders prefer an ascending auction over a sealed bid auction. We find very strong ceteris paribus preferences for the ascending institution...

This paper solves the equilibrium bid functions of third- and higher-price auctions for a large class of distribution functions of bidders’ valuations, assuming the symmetric independent private values framework, and risk neutrality. In all these auctions, equilibrium bids exceed bidders’...