Allotment in First-Price Auctions: An Experimental Investigation

Corazzini, Luca and Galavotti, Stefano and Sausgruber, Rupert and Valbonesi, Paola (2016) Allotment in First-Price Auctions: An Experimental Investigation. Experimental Economics, 20 (1). pp. 70-99. ISSN 1573-6938

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Abstract

We experimentally study the effects of allotment - the division of an item into homogeneous units - in independent private value auctions. We compare a single-item, first-price auction with two equivalent treatments with allotment: a two-unit discriminatory auction and two simultaneous single-unit first-price auctions. We find that allotment mitigates overbidding, with this effect being stronger in the discriminatory auction. In the allotment treatments, we observe large and persistent bid spreading. Across treatments, the discriminatory auction is the least efficient and generates the lowest revenue.

Item Type:	Article
Additional Information:	We thank Paolo Bertoletti, Maria Bigoni, Ottorino Chillemi, Christopher Cotton, Dirk Engelmann, Jose-Antonio Espin-Sanchez, Carlos Alos-Ferrer, Oscar Mitnik, Marco Pagnozzi, Alexander Rasch, Achim Wambach and participants at the PRIN Workshop in Capri, the XXVII Jornadas de Economia Industrial in Murcia, the Economics Department Seminar in Pavia, the 2012 ASSET Conference in Cyprus and the seminars at the Chaire EPPP- Paris 1, Pantheon Sorbonne, the "Design and Behavior" group of the University of Cologne, the PET 13 - International meeting of the Association for Public Economic Theory, for their comments. We are indebted to Giancarlo Spagnolo for very helpful discussions. Financial support from the University of Padova (University Project CPDA084881/08), the Italian Ministry of Education (PRIN No.20089PYFHY 002) and the Austrian Science Fund (FWF - Project S 103070-G14) is gratefully acknowledged. All remaining errors are our own. The final publication is available at Springer via http://dx.doi.org/10.1007/s10683-016-9476-1. The online version of this article contains supplementary material, which is available to authorized users.
Keywords:	allotment / multi-unit auction / discriminatory auction / first-price auction / laboratory experiment
Classification Codes:	JEL H57, D44
Divisions:	Departments > Volkswirtschaft Departments > Volkswirtschaft > Finanzwissenschaft u öffentl. Wirtschaft Forschungsinstitute > Internationale Besteuerung Kompetenzzentren > Experimentalforschung
Version of the Document:	Accepted for Publication
Variance from Published Version:	Minor
Depositing User:	Elena Simukovic
Date Deposited:	19 Sep 2017 13:03
Last Modified:	19 Sep 2017 13:37
Related URLs:	Publisher https://www.springer.com/de/open-access/...
FIDES Link:	https://bach.wu.ac.at/d/research/results/74614/
URI:	https://epub.wu.ac.at/id/eprint/5755

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