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- Title
Auction design and order of sale with budget-constrained bidders.
- Authors
Bergmann, Ulrich; Konovalov, Arkady
- Abstract
The presence of financial constraints changes traditional auction theory predictions. In the case of multiple items, such constraints may affect revenue equivalence and efficiency of different auction formats. We consider a simple complete information setting with three financially constrained bidders and two items that have different values common to all the bidders. Using a laboratory experiment, we find that, as predicted by theory, it is more beneficial for the seller to sell the higher value item first. We then show that the first-price sealed-bid auction yields higher revenue than the English auction, with significant differences in learning of equilibrium strategies.
- Subjects
AUCTIONS; BIDDERS; PREDICTION theory; NASH equilibrium; LEARNING strategies
- Publication
Experimental Economics, 2024, Vol 27, Issue 1, p36
- ISSN
1386-4157
- Publication type
Article
- DOI
10.1007/s10683-023-09812-y