Abstract Some people assign negative values for new products sold on laboratory auction blocks (i.e., irradiated meat). We explore bidding behavior in two Vickrey auctions when people have positive and negative induced values for the good. Aggregate bidding in the second-price auction is precise but biased-highest-value positive bidders tend to overstate benefits, whereas lowest-negative bidders understate losses. In contrast, bidding behavior in the random nth-price auction is demand revealing irrespective of induced value, but it is imprecise. Examining on-and off-margin bidding behavior, we cannot conclude that any segments of demand are significantly different than the demand revealing regression line. Rather than having people bid on new products, we use a classic induced value design that controls preferences to create a testable behavioral benchmark (Smith). Our auction environment has people bidding over a good in which both positive and negative induced values exist within the population of bidders. We examine the potential bias and precision of bidding behavior for two popular auctions used in laboratory valuation work-the classic Vickrey second-price auction and the random nth-price auction, a mechanism initially designed to engage people with values otherwise below the market-clearing price in the second-price auction (se
