Price Information and Bidding Behavior in Repeated Second‐Price Auctions

Examining panel data on bidding behavior in over forty second‐price auction markets with repeated trials, we observe that ( i ) posted prices influence the behavior of the median naive bidder; ( ii ) posted prices do not affect the behavior of the median experienced bidder or the bidder for familiar goods; and ( iii ) anticipated strategic behavior wanes after two trials. The results suggest that while affiliation might exist in auctions for new goods, the repeated trial design with nonprice information removes the correlation of values and provides the experience that bidders need to understand the market mechanism.