Resource title

Outside options: another reason to choose the first-price auction

Resource image

image for OpenScout resource :: Outside options: another reason to choose the first-price auction

Resource description

In this paper we study equilibrium- and experimental bidding behaviour in first-price and second price auctions with outside options. We find that bidders do respond to outside options and to variations of common knowledge about competitors outside options. However, overbidding in first-price auctions is significantly higher with outside options than without. First-price auctions yield more revenue than second-price auctions. This revenue-premium is significantly higher with outside options. In second-price auctions the introduction of outside options has only a small effect.

Resource author

Oliver Kirchkamp, Eva Poen, J. Philipp Reiss

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25708

Resource license

Adapt according to the presented license agreement and reference the original author.