We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding in first-price auctions. We investigate how the amount of underbidding depends on seemingly innocent parameters of the experimental setup. To structure our data we present and...

Deviations from equilibrium bids in auctions can be related to inconsistent expectations with correct best replies (see Eyster and Rabin, 2005; Crawford and Iriberri, 2007) or correct expectations but small (perhaps quantal-response) mistakes in best replies (see Goeree et al., 2002). To distinguish...

We experimentally investigate four allocation mechanisms - all based on the fair division approach, with varying bid elicitation methods and price rules - in terms of their allocation efficiency, distributional effects, and regularities in individual bidding behavior. In a repeated design, an...

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...

We use experiments to compare dynamic and static wars of attrition (i.e. second-price all-pay auctions) and first-price all-pay auctions. Many other studies find overbidding in first-price all-pay auctions. We can replicate this property. In wars of attrition, however, we find systematic...

Bidding rules that guarantee procedural fairness may induce more equilibrium bidding and moderate other-regarding concerns. In our experiment, we assume commonly known true values and only two bidders to implement a best-case scenario for other-regarding concerns. The two-by-two factorial design...

Viewing individual contributions as investments in emission reduction we rely on the familiar linear public goods- game to set global reduction targets which, if missed, imply that all payoffs are destroyed with a certain probability. Regulation by milestones does not only impose a final...

This paper reports results of a 100-round Yes-No game experiment conducted under the random matching protocol. In contrast to ultimatum bargaining, the responder in the Yes-No game decides whether to accept without knowing the proposer's offer. Although both games have the same solution outcome...