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Experimental internet auctions with random information retrieval

Published online by Cambridge University Press:  14 March 2025

Doron Sonsino  and
Radosveta Ivanova-Stenzel
Doron Sonsino*
Affiliation:
The School of Business Administration; The College of Management, 7 Rabin Boulevard, POB 9017, Rishon LeZion, Israel 75190
Radosveta Ivanova-Stenzel*
Affiliation:
Department of economics; Institute for Economic Theory III, Spandauer Strasse 1, 10178 Berlin, Germany
*
e-mail: sonsinod@colman.ac.il
e-mail: ivanova@wiwi.hu-berlin.de
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Abstract

We run an experiment where 97 subjects could retrieve records of completed past auctions before placing their bids in current one-bid, two-bid, and auction-selection games. Each subject was asked to participate in 3 current auctions; but could retrieve up to 60 records of completed (past) auctions. The results reveal a positive relation between the payoffs earned by the subjects and their history-inspection effort. Subjects act as if responding to the average bidding-ratios of the winners in the samples that they have retrieved. They apply intuitive signal-dependent stopping rules like “sample until observing a winner-value close to my won” or “find a close winner-value and try one more history” when sampling the databases. History-inspection directs bidders with relatively high private-valuations to moderate bidding which increases their realized payoffs. (JEL C9 D4 D8)

Keywords

Internet-auctionsobservational learningsampling rulesexperiments

JEL classification

D44: Auctions C93: Field Experiments D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness

Information

Type
Research Article
Information
Experimental Economics , Volume 9 , Issue 4 , December 2006 , pp. 323 - 341
Copyright
Copyright © 2006 Economic Science Association

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Footnotes

Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-7050-y.

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