Skip to main content
Article
Allotment in First-Price Auctions: An Experimental Investigation
Experimental Economics (forthcoming) (2016)
  • Luca Corazzini
  • Stefano Galavotti
  • Paola Valbonesi
  • Rupert Sausgruber
Abstract
We experimentally study the eff ects of allotment - the division of an item into homogeneous
units - in independent private value auctions. We compare a bundling fi rst-price
auction with two equivalent treatments where allotment is implemented: a two-unit discriminatory
auction and two simultaneous single-unit first-price auctions. We find that
allotment in the form of a discriminatory auction generates a loss of efficiency with respect
to bundling. In the allotment treatments, we observe large and persistent bid spread, and
the discriminatory auction is less efficient than simultaneous auctions. We provide a unified interpretation of our results that is based on both a non-equilibrium response to the
coordination problem characterizing the simultaneous auction format and a general class
of behavioral preferences that also includes risk aversion, joy of winning and loser's regret
as specifi c cases.
Keywords
  • Allotment,
  • multi-unit auction,
  • discriminatory auction,
  • first price auction,
  • laboratory experiment
Publication Date
Winter January 27, 2016
DOI
xx
Publisher Statement
Working paper 153/2012 - Dipartimento di Scienze Econ e Aziend. "Marco Fanno", second revised version September 2014.
Citation Information
Luca Corazzini, Stefano Galavotti, Paola Valbonesi, and Rupert Sausgruber. "Allotment in First-Price Auctions: An Experimental Investigation" 2012, Revised on July 2013.