Behavior in second-price auctions by highly experienced eBay buyers and sellers

Garratt, RJ; Walker, M; Wooders, J

Behavior in second-price auctions by highly experienced eBay buyers and sellers

Garratt, RJ Walker, M Wooders, J

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Publication Type:: Journal Article
Citation:: Experimental Economics, 2012, 15 (1), pp. 44 - 57
Issue Date:: 2012-03-01

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Field	Value	Language
dc.contributor.author	Garratt, RJ	en_US
dc.contributor.author	Walker, M	en_US
dc.contributor.author	Wooders, J https://orcid.org/0000-0002-4206-7137	en_US
dc.date.issued	2012-03-01	en_US
dc.identifier.citation	Experimental Economics, 2012, 15 (1), pp. 44 - 57	en_US
dc.identifier.issn	1386-4157	en_US
dc.identifier.uri	http://hdl.handle.net/10453/28597
dc.description.abstract	We report on sealed-bid second-price auctions that we conducted on the Internet using subjects with substantial prior experience: they were highly experienced participants in eBay auctions. Unlike the novice bidders in previous (laboratory) experiments, the experienced bidders exhibited no greater tendency to overbid than to underbid. However, even subjects with substantial prior experience tended not to bid their values, suggesting that the non-optimal bidding of novice subjects is robust to substantial experience in non-experimental auctions. We found that auction revenue was not significantly different from the expected revenue the auction would generate if bidders bid their values. Auction efficiency, as measured by the percentage of surplus captured, was substantially lower in our SPAs than in previous laboratory experiments. © 2011 Economic Science Association.	en_US
dc.relation.ispartof	Experimental Economics	en_US
dc.relation.isbasedon	10.1007/s10683-011-9287-3	en_US
dc.subject.classification	Economics	en_US
dc.title	Behavior in second-price auctions by highly experienced eBay buyers and sellers	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	15	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1505 Marketing	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	15	en_US

Abstract:

We report on sealed-bid second-price auctions that we conducted on the Internet using subjects with substantial prior experience: they were highly experienced participants in eBay auctions. Unlike the novice bidders in previous (laboratory) experiments, the experienced bidders exhibited no greater tendency to overbid than to underbid. However, even subjects with substantial prior experience tended not to bid their values, suggesting that the non-optimal bidding of novice subjects is robust to substantial experience in non-experimental auctions. We found that auction revenue was not significantly different from the expected revenue the auction would generate if bidders bid their values. Auction efficiency, as measured by the percentage of surplus captured, was substantially lower in our SPAs than in previous laboratory experiments. © 2011 Economic Science Association.

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http://hdl.handle.net/10453/28597