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

B-Tier
Journal: European Economic Review
Year: 2009
Volume: 53
Issue: 2
Pages: 153-169

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:eecrev:v:53:y:2009:i:2:p:153-169
Journal Field
General
Author Count
3
Added to Database
2026-01-25