Informed entry in auctions

Diego Aycinena; Hernán Bejarano; Lucas Rentschler

doi:10.1007/s00182-017-0583-9

Informed entry in auctions

Diego Aycinena, Hernán Bejarano, Lucas Rentschler

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

We examine entry decisions in first-price and English clock auctions with participation costs. Potential bidders observe their value and report maximum willingness to pay (WTP) to participate. Entry occurs if revealed WTP (weakly) exceeds the randomly drawn participation cost. We find no difference in WTP between auction formats, although males have a higher WTP for first-price auctions. WTP is decreasing in the number of potential bidders, but this reduction is less than predicted and small in magnitude.

Original language	English (US)
Pages (from-to)	175-205
Number of pages	31
Journal	International Journal of Game Theory
Volume	47
Issue number	1
DOIs	https://doi.org/10.1007/s00182-017-0583-9
State	Published - Mar 1 2018

All Science Journal Classification (ASJC) codes

Statistics and Probability
Mathematics (miscellaneous)
Social Sciences (miscellaneous)
Economics and Econometrics
Statistics, Probability and Uncertainty

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10.1007/s00182-017-0583-9

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title = "Informed entry in auctions",

abstract = "We examine entry decisions in first-price and English clock auctions with participation costs. Potential bidders observe their value and report maximum willingness to pay (WTP) to participate. Entry occurs if revealed WTP (weakly) exceeds the randomly drawn participation cost. We find no difference in WTP between auction formats, although males have a higher WTP for first-price auctions. WTP is decreasing in the number of potential bidders, but this reduction is less than predicted and small in magnitude.",

author = "Diego Aycinena and Hern{\'a}n Bejarano and Lucas Rentschler",

note = "Funding Information: Financial support from the International Foundation for Research in Experimental Economics (IFREE) is gratefully acknowledged. Thanks also to Jorge Chang Urrea, Pedro Monz{\'o}n Alvarado, Diego Fernandez and Maximilian Pfeifer for outstanding research assistance. We have benefited from comments and suggestions from participants in seminars at Universidad Francisco Marroqu{\'i}n, Florida State University, the Economic Science Institute at Chapman University, CeDEx at the University of Nottingham, the University of California at Santa Barbara, the Antigua Experimental Economics Conference, and the North-American ESA conference. Publisher Copyright: {\textcopyright} 2017, Springer-Verlag GmbH Germany. Copyright: Copyright 2018 Elsevier B.V., All rights reserved.",

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doi = "10.1007/s00182-017-0583-9",

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Informed entry in auctions

Abstract

All Science Journal Classification (ASJC) codes

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