Bidding Behavior in Multi-Unit Auctions - An Experimental Investigation

Abstract

We present laboratory experiments of five different multi-unit auction mechanisms. Two units of a homogenous object were auctioned off among two bidders with flat demand for two units. We test whether expected demand reduction occurs in open and sealed-bid uniform-price auctions. Revenue equivalence is tested for these auctions as well as for the ausubel, the Vickrey and the discriminatory sealed-bid auction. Furthermore, we compare the five mechanisms, with respect to the efficient allocation of the units.