Does Feedback Really Matter in One-Shot First-Price Auctions?

 

Peter Katuščák, Fabio Michelucci and Miroslav Zajíček

 

Journal of Economic Behavior & Organization 119, 139-152 (2015).

 

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Abstract

Does the type of posterior feedback affect how people decide in one-shot environments? We revisit this question in first-price auction markets. We consider three feedback types: minimal (only knowing whether winning or not), loser (also knowing the winning bid) and winner (knowing the second highest bid if winning). Filiz-Ozbay and Ozbay (2007) find that loser as opposed to minimal or winner feedback increases bids. We use three novel protocols and additionally replicate theirs. Using a sample of 624 subjects, we find that bidders’ ex ante knowledge of posterior feedback type has no systematic effect on the average bid/value ratios.

Keywords: auctions, feedback, regret, market design.

JEL Classification: C91, C92, D44.


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