Bimodal Bidding in Experimental All-Pay Auctions

Games

Christiane Ernst¹ 

[1] Alumna of the London School of Economics, London WC2A 2AE, UK; E-Mail:

关键词: all-pay auction;    prospect theory;    experiment;   

DOI  :  10.3390/g4040608

来源: mdpi

【 摘 要 】

We report results from experimental first-price, sealed-bid, all-pay auctions for a good with a common and known value. We observe bidding strategies in groups of two and three bidders and under two extreme information conditions. As predicted by the Nash equilibrium, subjects use mixed strategies. In contrast to the prediction under standard assumptions, bids are drawn from a bimodal distribution: very high and very low bids are much more frequent than intermediate bids. Standard risk preferences cannot account for our results. Bidding behavior is, however, consistent with the predictions of a model with reference dependent preferences as proposed by the prospect theory.

【 授权许可】

CC BY   
© 2013 by the authors; licensee MDPI, Basel, Switzerland.