IDEAS home Printed from https://ideas.repec.org/p/zbw/upadbr/b2016.html
   My bibliography  Save this paper

In it to win it: Experimental evidence on unique bid auctions

Author

Listed:
  • Baethge, Caroline
  • Fiedler, Marina
  • Haruvey, Ernan

Abstract

We examine bidding motives in discrete-point unique bid auctions in a laboratory setting. In lowest (highest) unique bid auctions, the participant with the lowest (highest) unique bid wins the auction. We posit two sets of motives in this type of auctions - a winning motive that is driven by the desire to win and a profit motive that is driven by the expected payoff. In the lowest unique bid auction (LUBA), the profit and winning motive lead to the same bidding strategy in equilibrium. In the highest unique bid auction (HUBA), the profit and winning motive lead to different bidding strategies in equilibrium. Using a utility-based choice framework, we identify and characterize the motives. Our findings suggest that bidders' behavior is driven by an array of motives. We find that not only does the winning motive play a key role in behavior, but other considerations such as reinforcement and coordination enter as well.

Suggested Citation

  • Baethge, Caroline & Fiedler, Marina & Haruvey, Ernan, 2016. "In it to win it: Experimental evidence on unique bid auctions," Passauer Diskussionspapiere, Betriebswirtschaftliche Reihe B-20-16, University of Passau, Faculty of Business and Economics.
    • Handle: RePEc:zbw:upadbr:b2016
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/179469/1/1023328259.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andrea Gallice, 2009. "Lowest Unique Bid Auctions with Signals," Carlo Alberto Notebooks 112, Collegio Carlo Alberto, revised Sep 2009.
    2. Ertaç, Seda & Hortaçsu, Ali & Roberts, James W., 2011. "Entry into auctions: An experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 168-178, March.
    3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    4. repec:awi:wpaper:0471 is not listed on IDEAS
    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. Tobias Salz & Emanuel Vespa, 2020. "Estimating dynamic games of oligopolistic competition: an experimental investigation," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 447-469, June.
    2. Robert Östling & Joseph Tao-yi Wang & Eileen Y. Chou & Colin F. Camerer, 2011. "Testing Game Theory in the Field: Swedish LUPI Lottery Games," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 1-33, August.
    3. Ertac, Seda & Gurdal, Mehmet Y., 2019. "Preference Communication and leadership in group decision-making," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 80(C), pages 130-140.
    4. Tatiana Kozitsina & Alexander Chaban & Evgeniya Lukinova & Mikhail Myagkov, 2020. "The effect of monetary incentives on sociality induced cooperation," Papers 2011.07597, arXiv.org.
    5. Diego Aycinena & Hernán Bejarano & Lucas Rentschler, 2018. "Informed entry in auctions," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(1), pages 175-205, March.
    6. Yamada, Takashi & Hanaki, Nobuyuki, 2016. "An experiment on Lowest Unique Integer Games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 88-102.
    7. Fu, Qiang & Ke, Changxia & Tan, Fangfang, 2015. "“Success breeds success” or “Pride goes before a fall”?," Games and Economic Behavior, Elsevier, vol. 94(C), pages 57-79.
    8. Nadir Altinok & Abdurrahman Aydemir, 2015. "The Unfolding of Gender Gap in Education," Working Papers 934, Economic Research Forum, revised Aug 2015.
    9. Qiang Fu & Changxia Ke & Fangfang Tan, 2013. ""Success Breeds Success" or "Pride Goes Before a Fall"? Teams and Individuals in Multi-contest Tournaments," Working Papers tax-mpg-rps-2013-06, Max Planck Institute for Tax Law and Public Finance.
    10. Klijn, Flip & Pais, Joana & Vorsatz, Marc, 2019. "Static versus dynamic deferred acceptance in school choice: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 113(C), pages 147-163.
    11. Ederer, Florian & Stremitzer, Alexander, 2017. "Promises and expectations," Games and Economic Behavior, Elsevier, vol. 106(C), pages 161-178.
    12. Bosch-Domènech, Antoni & Vriend, Nicolaas J., 2013. "On the role of non-equilibrium focal points as coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 52-67.
    13. Eva M. Krockow & Masanori Takezawa & Briony D. Pulford & Andrew M. Colman & Samuel Smithers & Toshimasa Kita & Yo Nakawake, 2018. "Commitment-enhancing tools in Centipede games: Evidencing European–Japanese differences in trust and cooperation," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(1), pages 61-72, January.
    14. Wendelin Schnedler & Nina Lucia Stephan, 2020. "Revisiting a Remedy Against Chains of Unkindness," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(3), pages 347-364, July.
    15. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2021. "Group size and matching protocol in contests," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(4), pages 1716-1736, November.
    16. Radu Vranceanu & Damien Besancenot & Delphine Dubart, 2014. "Can Rumors and Other Uninformative Messages Cause Illiquidity ?," CEPN Working Papers hal-00841167, HAL.
    17. Basteck, Christian & Klaus, Bettina & Kübler, Dorothea, 2021. "How lotteries in school choice help to level the playing field," Games and Economic Behavior, Elsevier, vol. 129(C), pages 198-237.
    18. Ertac, Seda & Gumren, Mert & Gurdal, Mehmet Y., 2020. "Demand for decision autonomy and the desire to avoid responsibility in risky environments: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 77(C).
    19. David J. Cooper & Krista Saral & Marie Claire Villeval, 2021. "Why Join a Team?," Management Science, INFORMS, vol. 67(11), pages 6980-6997, November.
    20. Robert Gazzale & Julian Jamison & Alexander Karlan & Dean Karlan, 2013. "Ambiguous Solicitation: Ambiguous Prescription," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 1002-1011, January.

    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:zbw:upadbr:b2016. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwpasde.html .

    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.