Work

Is the ‘Linkage Principle’ Valid? Evidence from the Field

Year: 2014

Type: article

Abstract: We present field evidence concerning experienced bidders that supports the linkage principle—specifically, the prediction that in affiliated‐values auction environments the expected revenues generated at open‐outcry, ascending‐bid auctions are higher than those under auction formats that reveal less information to participants. Using field data from a large seller of automobiles who experimented with different selling formats, we have found that average revenues were significantly higher under an English auction than under a dynamic Internet auction format that revealed less information to bidders.

Source: Journal of Industrial Economics

DOI: 10.1111/joie.12048

Authors: Sung‐Jin Cho, Harry J. Paarsch, John Rust

Institutions: Seoul National University, The University of Melbourne, Georgetown University

Language: English

Topic: Auction Theory and Applications

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: National Research Foundation of Korea

Award: G1601178464