Are experimental auctions demand revealing when values are affiliated?

摘要

This paper presents the results of an auction experiment designed specifically to test whether value affiliation leads to a breakdown of the incentive compatibility of the second-price auction, which is one of the auctions most frequently used in experimental auction valuation. The design of the study mirrors the current state of the art in experimental auction valuation as closely as possible, except that homegrown value goods are replaced with induced values constructed so that each participant's value includes both private and common value components. Comparing the results of a second-price auction with those from a noncompetitive Becker-DeGroot-Marschak (BDM) mechanism, the paper finds modest evidence that second-price auction participants adjust their bids downward as predicted by theory. However, it also finds that repeated second-price auction rounds with price feedback lead to "overheating", with participants submitting bids in later rounds well in excess of their induced value. No such underbidding in early rounds or overheating in later rounds is observed with the BDM mechanism.