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A LABORATORY STUDY OF AUCTIONS WITH A BUY PRICE
Author(s) -
DURHAM YVONNE,
ROELOFS MATTHEW R.,
SORENSEN TODD A.,
STANDIFIRD STEPHEN S.
Publication year - 2013
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2011.00423.x
Subject(s) - common value auction , bidding , proxy bid , economics , microeconomics , multiunit auction , revenue , english auction , auction theory , vickrey auction , dutch auction , forward auction , revenue equivalence , unique bid auction , generalized second price auction , proxy (statistics) , computer science , finance , machine learning
We present a series of laboratory experiments that examine auctions with buy prices, which are prices that allow a bidder to stop the auction and buy the item immediately. Two types of buy prices are considered, one that is available throughout the auction and one that disappears with an initial bid. Both are evaluated with and without proxy bidding. We find that the use of a buy price increases revenue, early bidding, and auction efficiency. Differences between outcomes in auctions with permanent and temporary buy prices are consistent with the observed choices in auction design made by online auction sites . ( JEL C90, D44, C70, L81)