Bimodal bidding in experimental all-pay auctions

Artikel

We report results from experimental first-price, sealed-bid, all-pay auctions for a good with a common and known value. We observe bidding strategies in groups of two and three bidders and under two extreme information conditions. As predicted by the Nash equilibrium, subjects use mixed strategies. In contrast to the prediction under standard assumptions, bids are drawn from a bimodal distribution: very high and very low bids are much more frequent than intermediate bids. Standard risk preferences cannot account for our results. Bidding behavior is, however, consistent with the predictions of a model with reference dependent preferences as proposed by the prospect theory.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Games ; ISSN: 2073-4336 ; Volume: 4 ; Year: 2013 ; Issue: 4 ; Pages: 608-623 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Auctions ; Criteria for Decision-Making under Risk and Uncertainty
• Subject: all-pay auction ; prospect theory ; experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ernst, Christiane ; Thöni, Christian
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2013

Further information

• DOI: doi:10.3390/g4040608
• Handle: http://hdl.handle.net/10419/98535
• Last update: 10.03.2025, 11:41 AM CET