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An Experimental Analysis of Parallel Multiple Auctions

Author

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  • Tim Hoppe

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

At online auction platforms we often observed that substitutable goods are auctioned concurrently with auctions ending at the same time. I introduce an experimental setup of three sellers and four buyers in an ascending second price auction environment where every seller runs one auction with a homogeneous good and the buyers are confronted with single unit demand. I find that sellers revenue is significantly lower than theory predicts due to the fact that some auctions did not receive bids whereas other auctions concentrated the bids of all bidders. Moreover, I observe a statistically higher revenue of sellers setting the minimum starting price. Furthermore, my study shows that the buyers submit bids which are significantly lower than the private valuation every buyer receives. Comparing the efficiency of the parallel multiple auction setup to a double auction control experiment, I find a significant lower efficiency in parallel multiple auctions due to the coordination failure of the buyers.

Suggested Citation

  • Tim Hoppe, 2008. "An Experimental Analysis of Parallel Multiple Auctions," FEMM Working Papers 08031, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:08031
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    File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2008_Dateien/2008_31.pdf
    File Function: First version, 2008
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    Citations

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    Cited by:

    1. Heczko, Alexander & Kittsteiner, Thomas & Ott, Marion, 2023. "The benefits of auctioneer competition: Merging auctions and adding auctioneers," ZEW Discussion Papers 23-038, ZEW - Leibniz Centre for European Economic Research.
    2. Ravi Bapna & Chrysanthos Dellarocas & Sarah Rice, 2010. "Vertically Differentiated Simultaneous Vickrey Auctions: Theory and Experimental Evidence," Management Science, INFORMS, vol. 56(7), pages 1074-1092, July.
    3. Tsuchihashi, Toshihiro, 2012. "Sequential Internet auctions with different ending rules," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 583-598.
    4. Lopez-Rodriguez, I. & Hernandez-Tejera, M., 2015. "Infrastructure based on supernodes and software agents for the implementation of energy markets in demand-response programs," Applied Energy, Elsevier, vol. 158(C), pages 1-11.

    More about this item

    Keywords

    simultaneous auctions; internet auctions; market design; electronic business;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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