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An Experimental Comparison of Pricing in Two Auction Systems
Author(s) -
Frahm Donald G.,
Schrader Lee F.
Publication year - 1970
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1237260
Subject(s) - economics , common value auction , variable pricing , microeconomics , outcome (game theory) , econometrics , financial economics
Trading and pricing procedures are being increasingly viewed as variables in the marketing system, particularly as the pricing role of central markets declines. Quantification of the effect of pricing systems on price outcome is needed for decisions in this area. English (ascending bid) and Dutch (descending price) auctions are compared in a series of experiments. Specific hypotheses regarding price variation, pattern of price during an auction period, and departure from equilibrium price are tested. The experimental evidence indicates the existence of a significant area of indeterminacy in pricing processes.