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Experimental sealed bid first price auctions with directly observed bid functions

By R. Selten, J. Buchta and Bonn Univ. (Germany). Sonderforschungsbereich 303 - Information und die Koordination Wirtschaftlicher Aktivitaeten

Abstract

Nine groups of three subjects each repeatedly interacted in sealed bid first prices auctions for fifty periods. In every period each subject specified a piecewise linear bid function shown on the computer screen. Then random values were drawn for each subject and bids were determined according to the bid functions. The object was sold to the highest bidder at the price of his bid. Many bid functions were almost linear but a substantial fraction of them was non-monotonous. The subjects changed their bid functions considerably during the fifty periods of play. The direction of change exhibits marked regularities which can be explained by a 'learning direction theory'. The bid at last period's value tends to be lowered or not to be increased after the object has been obtained; it tends to be increased or not to be lowered if the object was not obtained but the price was below the value. A typicity analysis shows that subjects conform to the predictions of learning direction theory the more strongly the more typical they are. (orig.)SIGLEAvailable from TIB Hannover: RO 3009(270) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman

Topics: 05B - Information science, librarianship, 09J - Information theory, coding theory, signal processing, FIRST PRICE AUCTIONS: M, SEALED-BID AUCTION THEORY: M, MONOTONOUS BID FUNCTIONS, LINEAR BID FUNCTIONS, LEARNING DIRECTION THEORY, ECONOMICS, INFORMATION
Year: 1994
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Provided by: OpenGrey Repository
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