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Abstract
Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the "chopstick auction" in which bidders are confronted with the exposure problem. We do so both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is less efficient than the second-price sealed-bid auction and that it yields more the same revenue if bidders are inexperienced experienced. © 2008 Elsevier B.V. All rights reserved.
Item Type: | Journal article |
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Form of publication: | Publisher's Version |
Keywords: | Costs; Experiments; Game theory; Industrial economics; Programming theory, Chopstick auction; Exposure problem; Laboratory experiment; Multi-unit auctions; Second-price sealed-bid auction; Simple games, Commerce |
Faculties: | Economics Economics > Chairs > Seminar for Organizational Economics |
Subjects: | 300 Social sciences > 330 Economics |
ISSN: | 0167-7187 |
Language: | English |
Item ID: | 22029 |
Date Deposited: | 01. Dec 2014, 15:03 |
Last Modified: | 04. Nov 2020, 13:02 |
Available Versions of this Item
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The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions. (deposited 03. Dec 2014, 14:46)
- The chopstick auction. (deposited 01. Dec 2014, 15:03) [Currently Displayed]