Abstract
In repeated second-price experimental auctions, the winning bid is normally posted after each round. The posting of these winning prices after each round can result in bids submitted in later rounds to be interdependent with posted prices from earlier rounds. Several approaches in the past have tried to scrutinize their experimental data for value interdependence by regressing bids on lagged market prices or lagged bids and ignoring the inherent endogeneity problem. This paper introduces a formal test for bid interdependence in repeated second-price auctions with posted prices using a dynamic panel model. We then apply this test to formally check the presence of bid interdependence in three datasets used in previous studies.
| Original language | English |
|---|---|
| Pages (from-to) | 329-341 |
| Number of pages | 13 |
| Journal | Atlantic Economic Journal |
| Volume | 39 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2011 Dec 1 |
| Externally published | Yes |
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Keywords
- Bid interdependence
- Dynamic panel estimator
- Experimental auctions
- Second-price auction
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
Cite this
A Consistent Econometric Test for Bid Interdependence in Repeated Second-Price Auctions with Posted Prices. / Drichoutis, Andreas C.; Nayga, Jr, Rodolfo M.; Lazaridis, Panagiotis; Park, Beom Su.
In: Atlantic Economic Journal, Vol. 39, No. 4, 01.12.2011, p. 329-341.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - A Consistent Econometric Test for Bid Interdependence in Repeated Second-Price Auctions with Posted Prices
AU - Drichoutis, Andreas C.
AU - Nayga, Jr, Rodolfo M.
AU - Lazaridis, Panagiotis
AU - Park, Beom Su
PY - 2011/12/1
Y1 - 2011/12/1
N2 - In repeated second-price experimental auctions, the winning bid is normally posted after each round. The posting of these winning prices after each round can result in bids submitted in later rounds to be interdependent with posted prices from earlier rounds. Several approaches in the past have tried to scrutinize their experimental data for value interdependence by regressing bids on lagged market prices or lagged bids and ignoring the inherent endogeneity problem. This paper introduces a formal test for bid interdependence in repeated second-price auctions with posted prices using a dynamic panel model. We then apply this test to formally check the presence of bid interdependence in three datasets used in previous studies.
AB - In repeated second-price experimental auctions, the winning bid is normally posted after each round. The posting of these winning prices after each round can result in bids submitted in later rounds to be interdependent with posted prices from earlier rounds. Several approaches in the past have tried to scrutinize their experimental data for value interdependence by regressing bids on lagged market prices or lagged bids and ignoring the inherent endogeneity problem. This paper introduces a formal test for bid interdependence in repeated second-price auctions with posted prices using a dynamic panel model. We then apply this test to formally check the presence of bid interdependence in three datasets used in previous studies.
KW - Bid interdependence
KW - Dynamic panel estimator
KW - Experimental auctions
KW - Second-price auction
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UR - http://www.scopus.com/inward/citedby.url?scp=81255188041&partnerID=8YFLogxK
U2 - 10.1007/s11293-011-9292-0
DO - 10.1007/s11293-011-9292-0
M3 - Article
VL - 39
SP - 329
EP - 341
JO - Atlantic Economic Journal
JF - Atlantic Economic Journal
SN - 0197-4254
IS - 4
ER -