ICES Brown Bag for Tuesday, February 18

Events, Seminars | February 10, 2020

Join us for the ICES Brown Bag Lecture of the Spring 2020 semester, featuring Mikhail Freer.

Dr. Freer, of University of Essex, will discuss his paper Credibility in Second-Price Auctions: An Experimental Test (Abstract). The talk will take place on Tuesday, February 18th, from 12:00 to 1:00pm, in room 5075 of the Vernon Smith Hall, Arlington campus.

Coffee and dessert will be provided.

Please visit the Brown Bag Schedule to learn more about the Brown Bag series.

Abstract

We provide the first direct test of the Akbarpour and Li (2019) notion of credibility in an auction setting. In particular, we conduct a laboratory experiment to investigate behavior and outcomes in a non-credible version of the second-price auction. In contrast to previous experimental studies, the role of the seller is played by a human subject who receives the winner’s payment and who has agency to determine the outcome of the auction. While sellers often break the rules of the auction and overcharge the winning bidder, they typically do not maximize revenue. Bidders (imperfectly) anticipate the seller’s behavior and bid between the theoretical benchmarks of the first-price auction and the credible second-price auction. We show that our results are consistent with equilibrium behavior under lie-averse preferences.

<<< Back to News Page