Loading...
Please wait, while we are loading the content...
Similar Documents
How the Auction Design Influences Procurement Prices: An Experiment
| Content Provider | Scilit |
|---|---|
| Author | Ehrhart, Karl-Martin Ott, Marion |
| Copyright Year | 2019 |
| Description | Journal: SSRN Electronic Journal The targeted design of auctions has to take behavioral regularities into account. This pa- per explores whether procurement auction formats can take advantage of bidders’ willingness- to-pay-willingness-to-accept disparity. In a laboratory experiment, we compare four different second-price auction formats for procuring a good. The four formats are a sealed-bid auction and three different descending-clock auctions. We assume that a bidder’s willingness-to-accept exceeds his willingness-to-pay and that, depending on the auction format, a bidder’s reference- state shifts such that the bidder’s perspective moves from a willingness-to-accept perspective towards a willingness-to-pay perspective, thus inducing aggressive bids. In line with the predic- tion, auction prices decline across the four formats. In particular, we observe the lowest prices in those two clock auction formats that, at every auction stage, select a bidder as the current leading bidder. We conclude that mechanisms influence the reference state and that auctions that foster reference-state shifts lead to lower payments for the buyer. These results support and generalize findings on sales auctions. However, not all of our findings on procurement auctions mirror findings on sales auctions. Bidders overbid in sealed-bid procurement auctions, which does not mirror the commonly observed overbidding in sealed-bid sales auctions. |
| Related Links | https://madoc.bib.uni-mannheim.de/54500/1/dp19061.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3526022 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3526022 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2019-01-01 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Agricultural Economics Procurement Auction Wtp-wta Disparity Reference-dependence |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
