SFB 303 Discussion Paper No. B-270
Author:
Selten, Reinhard, and Joachim Buchta
Title: Experimental Sealed Bid First Price Auctions with Directly Observed
Bid Functions
Abstract: Nine groups of three subjects each repeatedly interacted in sealed bid
first price 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.
Keywords:
JEL-Classification-Number:
Creation-Date: February 1994
Unfortunately this paper is not available online. Please contact us to order a hardcopy.
17.02.1998, © Webmaster
