|By:||Regina Betz (Australian School of Business, the University of New South Wales)
Ben Greiner (School of Economics, Australian School of Business, the University of New South Wales)
Sascha Schweitzer (University of Bayreuth)
Stefan Seifert (University of Bayreuth)
We experimentally study the effect of auction format (sealed-bid vs. closed clock vs. open clock) and auction sequence (simultaneous vs. sequential) on bidding behaviour and auction outcomes in auctions of multiple related multi-unit items. Prominent field applications are the sale of emission permits, fishing rights, and electricity. We find that, when auctioning simultaneously, clock auctions outperform sealed-bid auctions in terms of efficiency and revenues. This advantage disappears when the items are auctioned sequentially. In addition, auctioning sequentially has positive effects on total revenues across all auction formats, resulting from fiercer competition on the item auctioned first.
|Keywords:||emission permits, auction design, laboratory experiment|
|JEL:||C90 D44 Q53|