In a laboratory experiment, we investigate the impact of temporary buy-options on efficiency, revenues, and bidding behavior in online proxy-auctions when bidders have independent private valuations. We show that the introduction of a buy-option reduces efficiency and at the same time fails to...

In markets with differentiated products Bertrand-Nash equilibria in pure strategies may not exist. Mixed strategies are difficult to calculate. For these cases Morgan and Shy (2000) suggest an alternative solution concept, the undercut-proof equilibrium (UPE). While the Nash-equilibrium is...

The presence of synergies in recurrent procurement auctions leads to an exposure problem and asymmetries among bidders. We consider sequential first- and second-price auctions with synergies in a setting with four bidders. In a series of experiments we compare the performance of the two pricing...

In this paper we show that in a private value setting first-price auctions can be preferred to second-price auctions. We consider a sequential auction of two objects with positive synergies and compare both auction formats. Although the second-price auction performs better in terms of efficiency...

This paper reports on a laboratory experiment which investigates the impact of institutions and institutional choice in constant-sum sender-receiver games. We compare individual sender and receiver behavior in two different institutions: A sanction-free institution which is given by the bare...

In this paper we show experimentally that in a sequential auction the presence of synergies leads to more overbidding which in turn may result in bankruptcies. In line with theoretical predictions we find that the seller benefits from the buyers’ synergies. In contrast to theory the buyers...

We study procurement auctions held in sequential and simultaneous formats. For thelatter format, we find less bid participation and more aggressive bidding for projects withstrong common value components and more competition for projects having strong privatevalue components.

We consider a dynamic homogenous oligopoly in which firms set prices repeatedly. Theory predicts that short-run price commitments have an increasing impact on profits and may lead to less price stability. The experiments that we conduct provide support for the first effect and against the second...

In this paper an infinite-horizon alternating-move Hotelling model in which consumers are uniformly distributed over the market is considered. In a Markov perfect equilibrium, a seller’s move in any period depends on the price the other seller is committed to. The analytic solution is given...

In this paper an algorithm is presented to compute all Nash equilibria for games in normal form on the only premises that the number of Nash equilibria is finite. The algorithm relies on decomposing the game by means of support-sets. For each support-set, the set of totally mixed equilibria of...