The chopstick auction: a study of the exposure problem in multi-unit auctions

Arbeitspapier

Multi-unit auctions are sometimes plagued by the so-called exposure problem. In this paper, we analyze a simple game called the chopstick auction' in which bidders are confronted with the exposure problem. We do so both in theory and in a laboratory experiment. In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present. In the experiment, however, we find that the chopstick auction is less efficient than the second-price sealed-bid auction and that it yields more [the same] revenue if bidders are inexperienced [experienced].

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1782

Classification and Topics

• Classification: Wirtschaft ; Auctions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Englmaier, Florian ; Guillén, Pablo ; Llorente, Loreto ; Onderstal, Sander ; Sausgruber, Rupert
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/25827
• Last update: 10.03.2025, 11:43 AM CET