IDEAS home Printed from https://ideas.repec.org/p/feb/natura/00526.html
   My bibliography  Save this paper

Price Information and Bidding Behavior in Repeated Second-Price Auctions

Author

Listed:
  • John List
  • Jason Shogren

Abstract

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.

Suggested Citation

  • John List & Jason Shogren, 1999. "Price Information and Bidding Behavior in Repeated Second-Price Auctions," Natural Field Experiments 00526, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00526
    as

    Download full text from publisher

    File URL: http://s3.amazonaws.com/fieldexperiments-papers2/papers/00526.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David M. Grether & James C. Cox, 1996. "The preference reversal phenomenon: Response mode, markets and incentives (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(3), pages 381-405.
    2. Dermot J. Hayes & Jason F. Shogren & Seung Youll Shin & James B. Kliebenstein, 1995. "Valuing Food Safety in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 40-53.
    3. Kagel, John H & Harstad, Ronald M & Levin, Dan, 1987. "Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study," Econometrica, Econometric Society, vol. 55(6), pages 1275-1304, November.
    4. Shogren, Jason F, 1990. "The Impact of Self-protection and Self-insurance on Individual Response to Risk," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 191-204, June.
    5. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-270, March.
    6. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    7. Jason F. Shogren & John A. Fox, 1996. "Consumer Preferences for Fresh Food Items with Multiple Quality Attributes: Evidence from an Experimental Auction of Pork Chops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 916-923.
    8. Elizabeth Hoffman & Dale J. Menkhaus & Dipankar Chakravarti & Ray A. Field & Glen D. Whipple, 1993. "Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef," Marketing Science, INFORMS, vol. 12(3), pages 318-338.
    9. Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
    10. Fox, John A. & Hayes, Dermot J. & Kliebenstein, James & Shogren, Jason F., 1994. "Consumer Acceptability of Milk from Cows Treated with Bovine Somatotropin," Staff General Research Papers Archive 702, Iowa State University, Department of Economics.
    11. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
    12. Melton, Brian & Huffman, Wallace & Shogren, Jason F., 1996. "Consumer Preferences for Fresh Food with Multiple Attributes: Evidence from an Experimental Auction of Pork Chops," Staff General Research Papers Archive 5042, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chern, Wen S. & Kaneko, Naoya & Tarakcioglu, Gulay Babadogan, 2003. "Willingness to Pay for PEF-processed Orange Juice: Evidence from an Auction Experiment," 2003 Annual meeting, July 27-30, Montreal, Canada 21897, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2001. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingess To Pay For Nongenetically Modified Corn Chips," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-18, July.
    3. Hurley, Sean P. & Kliebenstein, James B., 2003. "Interpreting Bids From A Vickrey Auction When There Are Public Good Attributes," 2003 Annual meeting, July 27-30, Montreal, Canada 21965, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Hurley, Sean P. & Kliebenstein, James B., 1999. "The Potential For Marketing Pork Products With Embedded Environmental Attributes: Results From An Experimental Study," 1999 Annual meeting, August 8-11, Nashville, TN 21598, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
    6. Brown, Jennifer & Cranfield, John A.L. & Henson, Spencer J., 2003. "Misassessed Risk In Consumer Valuation Of Food Safety: An Experimental Approach," 2003 Annual meeting, July 27-30, Montreal, Canada 22194, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Jay R. Corrigan & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga & Matthew C. Rousu, 2012. "Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 97-115.
    8. Bruner, David M. & Huth, William L. & McEvoy, David M. & Morgan, O. Ashton, 2014. "Consumer Valuation of Food Safety: The Case of Postharvest Processed Oysters," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(2), pages 300-318, August.
    9. Ty Feldkamp & Ted C. Schroeder, 2004. "Experimental Auction Procedure: Impact on Valuation of Quality Differentiated Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 389-405.
    10. Frode Alfnes, 2007. "Willingness to Pay versus Expected Consumption Value in Vickrey Auctions for New Experience Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 921-931.
    11. Tegene, Abebayehu & Huffman, Wallace E. & Rousu, Matthew C. & Shogren, Jason F., 2003. "The Effects Of Information On Consumer Demand For Biotech Foods: Evidence From Experimental Auctions," Technical Bulletins 33577, United States Department of Agriculture, Economic Research Service.
    12. Lusk Jayson L & Alexander Corinne & Rousu Matthew C., 2007. "Designing Experimental Auctions for Marketing Research: The Effect of Values, Distributions, and Mechanisms on Incentives for Truthful Bidding," Review of Marketing Science, De Gruyter, vol. 5(1), pages 1-32, October.
    13. Andreas C. Drichoutis & Panagiotis Lazaridis & Rodolfo M. Nayga, 2009. "Would consumers value food-away-from-home products with nutritional labels?," Agribusiness, John Wiley & Sons, Ltd., vol. 25(4), pages 550-575.
    14. Hurley, Sean P. & Kliebenstein, James B., 2003. "A Tale Of Two Premiums- Examining Bids From A Multiple Round Vickrey Auction With Differing Information Sets," 2003 Annual meeting, July 27-30, Montreal, Canada 22192, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. List, John A. & Shogren, Jason F., 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 193-205, October.
    16. repec:ken:wpaper:0602 is not listed on IDEAS
    17. Shogren, Jason F., 2006. "Experimental Methods and Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 19, pages 969-1027, Elsevier.
    18. Lee, Ji Yong & Fox, John A., 2016. "The effects of allowing substitutes on bidding behavior in a private value experimental auction," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235900, Agricultural and Applied Economics Association.
    19. Huffman, Wallace & Rousu, M. & Shogren, Jason F. & Tegene, Abebayehu, 1009. "Are U.S. Consumers Tolerant of GM Foods?," Staff General Research Papers Archive 12336, Iowa State University, Department of Economics.
    20. Xue, Hong & Mainville, Denise Y. & You, Wen & Nayga, Rodolfo M., Jr., 2009. "Nutrition Knowledge, Sensory Characteristics and Consumers’ Willingness to Pay for Pasture-Fed Beef," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49277, Agricultural and Applied Economics Association.
    21. Hayes, D. J. & Fox, J. A. & Shogren, J. F., 2002. "Experts and activists: how information affects the demand for food irradiation," Food Policy, Elsevier, vol. 27(2), pages 185-193, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:feb:natura:00526. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Francesca Pagnotta (email available below). General contact details of provider: http://www.fieldexperiments.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.