Framing the first-price auction

Theodore L. Turocy, Elizabeth Watson, Raymond Battalio

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)

Abstract

We revisit the result that, in laboratory independent private values auction, the first-price sealed bid and descending clock (or Dutch) implementations are not isomorphic. We investigate the hypothesis that this arises from framing and presentation effects. Our design focuses on a careful construction of subject interfaces that present the two environments as similarly as possible. Our sessions also consist of more auction periods to test whether any initial framing effects subsequently decrease over time. We find the difference between the implementations persists. To further investigate the difference, we report on an intermediate implementation which operates like the Dutch auction, but in which the clock continues to tick to the lowest price without informing bidders when others have bid on the object.
Original languageEnglish
Pages (from-to)37-54
Number of pages18
JournalExperimental Economics
Volume10
Issue number1
Early online date1 Feb 2007
DOIs
Publication statusPublished - Mar 2007

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