Credibility in second-price auctions: an experimental test

• Published in: Experimental economics : a journal of the Economic Science Association Vol. 27; no. 1; pp. 58 - 79
• Main Authors: Dianat, Ahrash, Freer, Mikhail
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.03.2024; Springer Nature B.V
• Subjects: Auctions; Behavior; Behavioral/Experimental Economics; Bidding; Bids; Cheating; Credibility; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Game Theory; Microeconomics; Operations Research/Decision Theory; Original Paper; Research subjects; Social and Behav. Sciences; Auctions; D90; C90; D44; Experiments; Mechanism design

We provide the first direct test of how the credibility of an auction format affects bidding behavior and final outcomes. To do so, we conduct a series of laboratory experiments where the role of the seller is played by a human subject who receives the revenue from the auction and who (depending on...