We experimentally study the effects of allotment-the division of an item into homogeneous units-in independent private value auctions. We compare a bundling first-price auction with two equivalent treatments where allotment is implemented: a two-unit discriminatory auction and two simultaneous single-unit first-price auctions. We find that allotment in the form of a discriminatory auction generates a loss of efficiency with respect to bundling. In the allotment treatments, we observe large and persistent bid spread, and the discriminatory auction is less efficient than simultaneous auctions. We provide a unified interpretation of our results that is based on both a non-equilibrium response to the coordination problem characterizing the simultaneous auction format and a general class of behavioral preferences that includes risk aversion, joy of winning and loser's regret as specific cases.
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|Titolo:||Allotment in first-price auctions: an experimental investigation|
|Data di pubblicazione:||2017|
|Appare nelle tipologie:||1.1 Articolo in rivista|