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 …

First-price auction experiments find often substantial overbidding which is typically related to risk aversion. We … introduce a model where some bidders use constrained linear bids. As with risk aversion this leads to overbidding if valuations … are high, but in contrast to risk aversion the model predicts underbidding if valuations are low. We test this model with …

Rabin's (2005) "cursed equilibrium," and evaluate the model's potential to explain behavior in auction experiments. The … "level-k" thinking, which describes behavior in many experiments with complete-information games. We derive the model … level-k model generalizes many insights from equilibrium auction theory. It also allows a unified explanation of the winnerâ …

significantly higher than predicted in the models based on rational behavior and that over-dissipation of rents (or overbidding or …

-seeking contests. Most previous studies use a lottery prize rule and linear cost, and find both overbidding relative to the Nash …

efficiency in contests. To this end, we conduct a laboratory experiment in which subjects are asked to allot costly resources … initial resource endowments mitigates the amount of overbidding and thus increases overall efficiency. Overbidding is also …

-seeking contests. Most previous studies use a lottery prize rule and linear cost, and ?nd both overbidding relative to the Nash …

contest experiments- (i) overbidding relative to the standard Nash equilibrium prediction and (ii) heterogeneous behavior of … ex-ante symmetric contestants. Based on the sample of contest experiments that we review, the median overbidding rate is … 72%. We provide different explanations for the overbidding phenomenon, including bounded rationality, utility of winning …

overbidding in contests. We find that overbidding is significantly higher when subjects are given a large per-experiment endowment …We design an experiment to test if the manner in which subjects receive the endowment has any bearing on the amount of …