Abstract
We analyze choices of sellers, each setting a reserve price in a laboratory first price auction with automated equilibrium bidding. Subjects are allowed to gain experience for a fixed period of time prior to making a single payoff-relevant choice. Behavior of more experienced sellers was consistent with benchmark theory: average reserve price for these sellers was independent of the number of bidders and equaled the predicted level. Less experienced sellers however deviated from the theoretical benchmark: on average, they tended to shade reserve price below the predicted level and positively relate it to the number of bidders.
Original language | English |
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Article number | 79 |
Journal | Games |
Volume | 9 |
Issue number | 4 |
DOIs | |
Publication status | Published - 9 Oct 2018 |
JEL classifications
- c91 - Design of Experiments: Laboratory, Individual
- d44 - Auctions
Keywords
- reserve price
- first-price auction
- experience
- seller learning