Abstract
Experimental research on first price sealed bid auctions has usually involved repeated settings with information feedback on winning bids and payoffs after each auction round. Relative to the risk neutral Nash equilibrium, significantly higher bidding has been reported. The present paper reports the results of experimental first price auctions with n=7 where feedback on payoffs and winning bids is withheld. Under these conditions, average bidding is below the risk neutral Nash equilibrium prediction but converges to it with repetition.
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Neugebauer, T., Perote, J. Bidding ‘as if’ risk neutral in experimental first price auctions without information feedback. Exp Econ 11, 190–202 (2008). https://doi.org/10.1007/s10683-007-9166-0
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DOI: https://doi.org/10.1007/s10683-007-9166-0
Keywords
- Experimental economics
- First-price sealed-bid auctions
- Independent private value model
- Bidding theory
- Risk aversion
- Learning