Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions
We analyze choices of sellers, each setting a reserve price in a laboratory first price auction with automated equilibrium bidding. Subjects are allowed to gain experience for a fixed period of time prior to making a single payoff-relevant choice. Behavior of more experienced sellers was consistent...
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| Format: | Article |
| Language: | English |
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MDPI AG
2018-10-01
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| Series: | Games |
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| Online Access: | http://www.mdpi.com/2073-4336/9/4/79 |
| _version_ | 1819065702484541440 |
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| author | Priyodorshi Banerjee Shashwat Khare P. Srikant |
| author_facet | Priyodorshi Banerjee Shashwat Khare P. Srikant |
| author_sort | Priyodorshi Banerjee |
| collection | DOAJ |
| description | We analyze choices of sellers, each setting a reserve price in a laboratory first price auction with automated equilibrium bidding. Subjects are allowed to gain experience for a fixed period of time prior to making a single payoff-relevant choice. Behavior of more experienced sellers was consistent with benchmark theory: average reserve price for these sellers was independent of the number of bidders and equaled the predicted level. Less experienced sellers however deviated from the theoretical benchmark: on average, they tended to shade reserve price below the predicted level and positively relate it to the number of bidders. |
| first_indexed | 2024-12-21T15:50:40Z |
| format | Article |
| id | doaj.art-57dadb75661b4b0fae803791694f16af |
| institution | Directory Open Access Journal |
| issn | 2073-4336 |
| language | English |
| last_indexed | 2024-12-21T15:50:40Z |
| publishDate | 2018-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Games |
| spelling | doaj.art-57dadb75661b4b0fae803791694f16af2022-12-21T18:58:15ZengMDPI AGGames2073-43362018-10-01947910.3390/g9040079g9040079Learning to Set the Reserve Price Optimally in Laboratory First Price AuctionsPriyodorshi Banerjee0Shashwat Khare1P. Srikant2Economic Research Unit, Indian Statistical Institute, Baranagar, Kolkata, West Bengal 700108, IndiaSchool of Business and Economics, Maastricht University, 6211 LK Maastricht, The NetherlandsMadras School of Economics, Chennai, Tamil Nadu 600025, IndiaWe analyze choices of sellers, each setting a reserve price in a laboratory first price auction with automated equilibrium bidding. Subjects are allowed to gain experience for a fixed period of time prior to making a single payoff-relevant choice. Behavior of more experienced sellers was consistent with benchmark theory: average reserve price for these sellers was independent of the number of bidders and equaled the predicted level. Less experienced sellers however deviated from the theoretical benchmark: on average, they tended to shade reserve price below the predicted level and positively relate it to the number of bidders.http://www.mdpi.com/2073-4336/9/4/79reserve pricefirst-price auctionexperienceseller learning |
| spellingShingle | Priyodorshi Banerjee Shashwat Khare P. Srikant Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions Games reserve price first-price auction experience seller learning |
| title | Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions |
| title_full | Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions |
| title_fullStr | Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions |
| title_full_unstemmed | Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions |
| title_short | Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions |
| title_sort | learning to set the reserve price optimally in laboratory first price auctions |
| topic | reserve price first-price auction experience seller learning |
| url | http://www.mdpi.com/2073-4336/9/4/79 |
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