The Chopstick auction: A study of the exposure problem in multi-unit auctions
Englmaier,F. Guillén,P. Llorente,L. Onderstal,A.M. Sausgruber,R.
Englmaier,F.
Guillén,P.
Llorente,L.
Onderstal,A.M.
Sausgruber,R.
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].
Description
Appeared earlier as CentER DP 2002-35 (revised title)
Date
2009
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Research Projects
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Citation
Englmaier, F, Guillén, P, Llorente, L, Onderstal, A M & Sausgruber, R 2009, 'The Chopstick auction : A study of the exposure problem in multi-unit auctions', International Journal of Industrial Organization, vol. 27, no. 2, pp. 286-291.
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info:eu-repo/semantics/restrictedAccess