The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions

Englmaier, Florian; Guillén, Pablo; Llorente, Loretoe; Onderstal, Sander und Sausgruber, Rupert (2006): The Chopstick Auction: A Study of the Exposure Problem in Multi-Unit Auctions. CESifo Working Paper,

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.

• Dokumententyp: Paper
• Keywords: chopstick auction; exposure problem; laboratory experiment; second-price sealed-bid auction
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Organisationsökonomik
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: C90, D44
• Ort: München
• Sprache: Englisch