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Asymmetric information about rivals’ types in standard auctions: an experiment. (English) Zbl 1162.91354

Summary: This paper studies experimentally how information about rivals’ types affects bidding behavior in first- and second-price auctions. The comparative static hypotheses associated with information about rivals enables us to test the relevance of such information as well as the general predictions of the auction theory, by providing an effective means to control for risk aversion and other behavioral motives that were difficult to control for in previous experiments. Our experimental evidence provides strong support for the theory, and sheds light on the roles of risk aversion and the spite motive in first- and second-price auctions, respectively.

MSC:

91B26 Auctions, bargaining, bidding and selling, and other market models
91A90 Experimental studies
91B44 Economics of information
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References:

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