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

Rodney J. Garratt, Mark Walker, John Wooders

    Research output: Contribution to journalArticle

    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.

    Original languageEnglish (US)
    Pages (from-to)44-57
    Number of pages14
    JournalExperimental Economics
    Volume15
    Issue number1
    DOIs
    StatePublished - Mar 1 2012

    Fingerprint

    eBay
    Seller
    Buyers
    Second-price auction
    Auctions
    Bid
    Laboratory experiments
    Revenue
    World Wide Web
    Bidding
    Surplus

    Keywords

    • Auction
    • eBay
    • Experience
    • Sealed bid
    • Second-price

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance (miscellaneous)

    Cite this

    Behavior in second-price auctions by highly experienced eBay buyers and sellers. / Garratt, Rodney J.; Walker, Mark; Wooders, John.

    In: Experimental Economics, Vol. 15, No. 1, 01.03.2012, p. 44-57.

    Research output: Contribution to journalArticle

    Garratt, Rodney J. ; Walker, Mark ; Wooders, John. / Behavior in second-price auctions by highly experienced eBay buyers and sellers. In: Experimental Economics. 2012 ; Vol. 15, No. 1. pp. 44-57.
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