Corrigan, Jay and Drichoutis, Andreas and Lusk, Jayson and Nayga, Rodolfo and Rousu, Matt (2011): Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration.
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It is generally thought that market outcomes are improved with the provision of market information. As a result, the use of repeated rounds with price feedback has become standard practice in the applied experimental auction valuation literature. We conducted two experiments to determine how rationally subjects behave with and without price feedback in a second price auction. Results from an auction for lotteries show that subjects exposed to price feedback are significantly more likely to commit preference reversals. However, this irrationality diminishes in later rounds. Results from an induced value auction indicate that price feedback caused greater deviations from the Nash equilibrium bidding strategy. Our results suggest that while bidding on the same item repeatedly improves auction outcomes, this improvement is not the result of price feedback.
|Item Type:||MPRA Paper|
|Original Title:||Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration|
|Keywords:||bid affiliation; posted prices; induced value experiment; preference reversals; lotteries|
|Subjects:||D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions|
|Depositing User:||Andreas Drichoutis|
|Date Deposited:||03. Feb 2011 19:58|
|Last Modified:||20. Feb 2013 10:48|
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