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Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2010:17:
Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study

Tommy Andersson (), Christer Andersson and Ola Andersson ()

Abstract: This paper considers the sealed bid and ascending auction, which both identifies the minimum Walrasian equilibrium prices and where truthful preference revelation constitutes an equilibrium. Even though these auction formats share many theoretical properties, there are behavioral aspects that are not easily captured. To explore this issue in more detail, this paper experimentally investigates what role the design of the auction format has for its outcome. The results suggest that the sealed bid mechanism performs weakly better in all of investigated measures (consistent reporting, efficiency etc.). In addition, we find that the performance of the ascending auction is increasing over time, whereas the sealed bid auction shows no such tendency.

Keywords: Auctions; Non-manipulability; Efficiency; Experiments; (follow links to similar papers)

JEL-Codes: C91; D44; (follow links to similar papers)

10 pages, December 17, 2010

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This paper is published as:
Andersson, Tommy, Christer Andersson and Ola Andersson, (2013), 'Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study', Review of Economic Design, Vol. 17, pages 1-16
Andersson, Tommy, Christer Andersson and Ola Andersson, (2013), Sealed Bid Auctions vs. Ascending Bid Auctions: An Experimental Study, Vol. 17, Review of Economic Design.



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