Year: 2025
Type: book
Abstract: This paper reports results from a laboratory experiment on a continuous Japanese-English auction in a common-value 'wallet game'. The main objective is to test whether bidders follow the equilibrium bidding strategy predicted by theory. We find systematic deviations from equilibrium behaviour: instead of bidding according to the Nash equilibrium, subjects appear to rely on expected value (EV) bidding. As a consequence, observed auction prices are higher than the theoretical benchmark, and the winner's curse occurs in a substantial fraction of auctions. We analyse bidding behaviour in detail and discuss the implications of our findings.
Authors: Georgalos, Konstantinos, Gonçalves, Ricardo, Ray, Indrajit, SenGupta, Sonali
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7117285707
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