Decision Sciences
4 years ago

First-price auctions found more efficient than second-price auctions in study

Bid Functions in Auctions and Fair Division Games: Experimental Evidence
Werner Güth, Radosveta Ivanova‐Stenzel, Manfred Königstein, Martin Strobel

Paper Summary

The article explores how auctions and fair division games work by conducting an experiment with different pricing rules. They found that first-price auctions are more efficient than second-price auctions, even though common sense might suggest the opposite. The study also looked at how individuals make bids in these games.

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