Learning to bid – an experimental study of bid function adjustments in auctions and fair division games

Bibliographic Data

ID9949671
AuthorsWerner Güth (0000-0002-6810-6720, Max Planck Institute for Research into Economic Systems, Jena), Radosveta Ivanova‐Stenzel (Humboldt University of Berlin), Manfred Königstein (0000-0002-3486-2907, University of Erfurt), Martin Strobel (0000-0003-4692-1035, International Institute of Infonomics, Heerlen)
Year2003
Volume113
Issue487
Pages477-494
Publication date2003-04-01
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1111/1468-0297.00123
OpenAlexW2047437415
LanguageEN
Citations received6
References cited14

We examine learning behaviour in auction and fair division experiments with independent private values under two different price rules, first and second price. Participants play all four games repeatedly and submit complete bid functions rather than single bids. This allows us to study how institutional changes are anticipated and whether learning is influenced by the structural differences between games. We find that learning does not drive bidding towards the benchmark solution. Bid functions are adjusted globally rather than locally. Directional learning theory offers a partial explanation for bid changes. The data support a cognitive approach to learning

Auction theory · Bid shading · Bidding · Common value auction · Division (mathematics · Economics · Function (biology · Mathematical economics · Microeconomics · Proxy bid · Unique bid auction · Auction Theory and Applications · Computer Science · Consumer Market Behavior and Pricing · Experimental Behavioral Economics Studies · Mathematics

Tools

Open DOISci-HubOpen Access