Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment

List, John A.; Lucking-Reiley, David

doi:10.1257/aer.90.4.961

Cited by 169 publications

(128 citation statements)

References 23 publications

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“…So how unfamiliar is free shipping to bidders? Second, field experiments by List and Lucking-Reiley (2000) found confirmation of many of the theory predictions in comparing the uniform price auction to a 2-unit Vickrey auction, which is a very unfamiliar auction format.…”

Section: Suspicious Biddersmentioning

confidence: 89%

“…List and Lucking-Reiley (2000), who examine whether the auction theory prediction of demand reduction in multiple unit uniform price auctions is observed in the data, also use field experiments. Lucking- Reiley (1999) and Reiley (2005) conducted field experiments examining the implications of varying auction form and reserve prices using collectible trading cards on Usenet.…”

mentioning

confidence: 99%

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...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

Hossain

Morgan

2006

The B.E. Journal of Economic Analysis &Amp; Policy

229

201

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Many firms divide the price a consumer pays for a good into two pieces---the price for the item itself and the price for shipping and handling. With fully rational customers, the exact division between the two prices is irrelevant---only the total price matters. We test this hypothesis by selling matched pairs of CDs and Xbox games in a series of field experiments on eBay. In theory, the ending auction price should vary inversely with the shipping charge to leave the total price paid constant. Contrary to the theory, we find that charging a high shipping cost and starting the auction at a low opening price leads to higher numbers of bidders and higher revenues when the shipping charge is not excessive. We show that these results can be accounted for by boundedly rational bidding behavior such as loss-aversion with separate mental accounts for different attributes of the price or disregard for shipping costs.

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Section: Suspicious Biddersmentioning

confidence: 89%

mentioning

confidence: 99%

...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

Hossain

Morgan

2006

The B.E. Journal of Economic Analysis &Amp; Policy

229

201

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show abstract

“…Bidders could also send each other messages and discuss the o¤ers through anonymous chat. 18 There was a time limit of 3 minutes to reach agreement.…”

Section: Experimental Designmentioning

confidence: 99%

Efficiency in auctions with (failed) resale

Pagnozzi

Saral

2019

Journal of Economic Behavior & Organization

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We analyze how the possibility of resale a¤ects e¢ ciency in multi-object uniform-price auctions with asymmetric bidders using a combination of theory and experiments. The resale market is modeled as an unstructured bargaining game between auction bidders. Our experimental design consists of four treatments that vary the (exogenous) probability that bidders participate in a resale market after the auction. In all treatments, the possibility of resale increases e¢ ciency after the auction, but it also induces demand reduction by highvalue bidders during the auction, which reduces auction e¢ ciency. In contrast to what is usually argued, resale does not necessarily increase …nal e¢ ciency. When there is a low probability of a resale market, …nal e¢ ciency is actually lower than in an auction without resale.JEL Classi…cation: D44, C90

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“…They observe more demand reduction in the open ascending auction than in the sealed-bid uniform-price auction. Finally, List and Lucking-Reiley (2000) conduct a …eld experiment with sports cards and …nd evidence for demand reduction in the sealed-bid uniform-price auction, although revenues do not di¤er from those of a Vickrey auction because bidders bid too high on the …rst unit. Pooling the results of these di¤erent studies suggests that demand reduction is more pronounced in open ascending auctions than in sealed-bid uniform-price auctions.…”

Section: Introductionmentioning

confidence: 99%

Demand reduction and preemptive bidding in multi-unit license auctions

2012

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Multi-unit ascending auctions allow for equilibria in which bidders strategically reduce their demand and split the market at low prices. At the same time, they allow for preemptive bidding by incumbent bidders in a coordinated attempt to exclude entrants from the market. We consider an environment where both demand reduction and preemptive bidding are supported as equilibrium phenomena of the ascending auction. In a series of experiments, we compare its performance to that of the discriminatory auction. Strategic demand reduction is quite prevalent in the ascending auction even when entry imposes a (large) negative externality on incumbents. As a result, the ascending auction performs worse than the discriminatory auction both in terms of revenue and efficiency, while entrants' chances are similar across the two formats. Abstract Multi-unit ascending auctions allow for equilibria in which bidders strategically reduce their demand and split the market at low prices. At the same time, they allow for preemptive bidding by incumbent bidders in a coordinated attempt to exclude entrants from the market. We consider an environment where both demand reduction and preemptive bidding are supported as equilibrium phenomena of the ascending auction. In a series of experiments, we compare its performance to that of the discriminatory auction. Strategic demand reduction is quite prevalent in the ascending auction even when entry imposes a (large) negative externality on incumbents. As a result, the ascending auction performs worse than the discriminatory auction both in terms of revenue and e¢ ciency, while entrants'chances are similar across the two formats.JEL classi…cation: D44, D45, C91

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Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment

Cited by 169 publications

References 23 publications

...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

...Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay

Efficiency in auctions with (failed) resale

Demand reduction and preemptive bidding in multi-unit license auctions

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