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Seller Beware: Supply and Demand Reduction and Price Manipulation in Multiple‐Unit Uniform Price Auctions
Author(s) -
Winn Abel M.,
Parente Michael L.,
Porter David
Publication year - 2016
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/soej.12086
Subject(s) - common value auction , economics , microeconomics , demand reduction , reduction (mathematics) , monetary economics , mathematics , medicine , pathology , geometry
We experimentally compare under‐revelation of supply and demand across alternative variations of ascending and descending two‐sided price clock auctions. We find that buyers reduce demand more when the price is ascending but sellers’ behavior is consistent across clock directions. As a result, the clock price rule has empirical effects on efficiency even though it is theoretically neutral.