Theoretical and experimental analysis of auctions with negative externalities

• 成果类型: Article
• 署名作者: Hu, Youxin; Kagel, John; Xu, Xiaoshu; Ye, Lixin
• 署名单位: Southwestern University of Finance & Economics - China; University System of Ohio; Ohio State University; Shanghai Jiao Tong University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.07.012
• 发表日期: 2013
• 页码: 269-291
• 关键词: Auctions; Externality; Free riding; Aggressive bidding; experiments

摘要

We investigate a private value auction in which a single entrant on winning imposes a negative externality on two regular bidders. In an English auction when all bidders are active, regular bidders free ride, exiting before price reaches their values. In a first-price sealed-bid auction incentives for free riding and aggressive bidding coexist, limiting free riding compared to the English auction. We find substantial, though incomplete, free riding in the clock auction. In first-price auctions, regular bidders bid more aggressively than the entrant and both bid higher than in auctions with no externality. Predictions regarding revenue, efficiency, and successful entry between the two auctions are satisfied. (C) 2013 Elsevier Inc. All rights reserved.